Forbearance vs Deferment Mortgage

You generally cannot refinance your mortgage while you are actively in a forbearance period, as you are not considered “current” on your loan. Selling your home is usually possible, but you will need to pay off the total balance of your mortgage, including any deferred or missed payments, at the time of closing.

Servicers typically require proof of hardship. This may include recent pay stubs, bank statements, a letter explaining your financial situation, or documentation of the event that caused the hardship (such as medical bills or a termination notice). Being organized makes the application process much smoother.

There is no single “better” option; it depends on your financial outlook. If you expect a quick return to stable income, a forbearance plan might be manageable. If you need a longer period to recover, deferment is often more sustainable because it doesn’t force a large lump-sum payment immediately after the relief period ends.

This depends on your specific agreement. In many forbearance plans, interest continues to accrue on the unpaid principal balance. In some deferment scenarios, the missed payments are moved to the end of the loan as a non-interest-bearing balance. Always ask your servicer to clarify how interest will be handled in your specific case.

Yes, but you should act immediately. Being proactive is the best way to secure relief. If you wait until you are significantly behind, your options may be limited, and the foreclosure process might already be in motion. Contact your servicer at the first sign of financial trouble.

In many cases, no—provided you have a formal, approved agreement with your servicer. Federal guidelines often require servicers to report your account as “current” to credit bureaus during these periods. However, simply stopping payments without notifying your lender will lead to delinquency and significant credit damage.

Mortgage deferment—or payment deferral—is a process where the lender allows you to move your missed payments to the end of your loan. In many cases, these deferred payments become a non-interest-bearing balance that is only due when you pay off your loan, sell the home, or refinance.

No. Forbearance is not loan forgiveness. The payments you miss during the forbearance period are still owed. You will eventually have to repay them, either through a lump sum, a structured repayment plan, or by adding the amount to the end of your loan term via a modification.

Mortgage forbearance is a formal agreement with your loan servicer to temporarily stop or reduce your monthly payments for a set period. It is designed for borrowers facing documented financial hardship, such as a job loss or medical emergency, and is intended to prevent imminent foreclosure.

Think of forbearance as a temporary “pause” or “reduction” in payments due to a short-term crisis, while deferment is more about “moving” those missed payments to the end of the loan term. Forbearance typically requires a plan to catch up later, whereas deferment often pushes the balance to the maturity date of the loan.