Can I Sell My House While in Forbearance?
According to recent data, approximately 135,000 U.S. homeowners, or about 0.27%, are in forbearance plans. Of those, about 67% are in forbearance due to temporary hardships caused by job loss, divorce, death, or disability. If you’re among these homeowners, you may be wondering, “Can I sell my house while in forbearance?
In this post, we’ll explore your options to sell, even if you’re facing financial pressure. Whether your home’s value exceeds what you owe, or you’re underwater on your mortgage, there are paths to avoid foreclosure and move forward with a home sale.
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Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.
What is forbearance in real estate?
Forbearance in real estate is a temporary agreement between you and your lender that allows you to pause or reduce mortgage payments during financial hardship. It’s not a loan forgiveness program; you’ll still need to repay the missed or reduced payments later. The terms of your forbearance agreement can impact your options for managing your home and mortgage.
Can I sell my house while in forbearance?
Yes, you can sell your house while in forbearance. Selling may be a strategic way to avoid foreclosure and settle your mortgage debt. However, you’ll need to consider your home’s equity — how much of the home you actually own versus what you owe on the mortgage.
Communicating with your lender is essential. They need to be aware of your intent to sell, as they may have specific requirements or timelines for resolving your forbearance plan. The sale proceeds can be used to pay off your mortgage, including any missed payments. However, how you proceed with the sale will depend on what your home is worth and how much you owe on your mortgage.
If your house is worth more than what you owe
If your home’s market value exceeds your outstanding mortgage balance, you have positive equity. In this case:
- Work with a top real estate agent: Find a top-rated agent who can help you price your home correctly and navigate the selling process efficiently.
- Request an all-cash offer: A cash offer can expedite the sale, helping you quickly resolve your forbearance situation.
