If you struggle to make on-time mortgage payments, you may qualify for forbearance. While you’re in forbearance, you won’t be expected to pay your mortgage, but it may impact your financial health in the future.

    Many people entered a forbearance program during COVID-19 that allowed them to remain in their homes without worrying about mortgage payments, but does COVID forbearance affect getting a new mortgage?

    Forbearance may affect your ability to get a new mortgage or refinance your existing home loan because of the way it impacts your finances. While using a forbearance doesn’t automatically disqualify you from getting a new mortgage, it can make it much harder.

    However, there are still many advantages of forbearance. For instance, it prevents you from defaulting on your loan and allows you to continue living in your home during financial hardship. If you’re in forbearance or forbearance recently ended, you may qualify for a new mortgage loan, but it ultimately depends on your unique situation.

    Keep reading to learn about forbearance and how it can affect your ability to get a new mortgage.


    • Mortgage forbearance may affect your ability to obtain a new mortgage loan or refinance your existing one, depending on your unique circumstances and loan type.
    • Forbearance is always better than a foreclosure because missed payments stay on your credit report for only three years versus seven.
    • How long you have to wait to refinance a loan after forbearance depends on the type of loan.

    How Does Forbearance Work?

    Forbearance is an agreement between a borrower and lender where the lender agrees to let you temporarily reduce or stop payments altogether for an agreed period.

    Forbearance is designed to help borrowers deal with hardship. For instance, if you had an illness that required you to miss work or lose your job, you may qualify for forbearance.

    If you enter into forbearance, you’ll still be responsible for paying your mortgage once the set period is over. There are three types of forbearance that dictate how borrowers repay their missed payments:

    • Reinstatement: With reinstatement, borrowers must repay any missed payments in one lump sum. This option is typically better for those whose financial troubles are resolved before the end of the forbearance period.
    • Repayment plans: Many people use repayment plans to pay off their mortgage after forbearance. With a repayment plan, a portion of the missed payments will be added to your existing mortgage payments.
    • Deferral: Deferral allows you to stop making mortgage payments during forbearance and defer those payments to a later time once forbearance ends. With the deferral method, you won’t usually incur more interest, but you’ll be responsible for paying missed payments when you sell your home or pay off the loan in full.

    Couple sitting on the couch and managing their finances with a laptop and paperwork spread out in front of them.

    Are You Eligible for a New Mortgage After Forbearance?

    Does forbearance affect getting a new mortgage? Sometimes. Whether you are eligible for a new mortgage or refinance after forbearance largely depends on whether or not you’ve caught up on your missed payments.

    Mortgage forbearance doesn’t affect your credit score, but it’s still considered a financial hardship that may appear on your credit report, so future lenders might see it. However, the situation also matters. For instance, does COVID forbearance affect getting a new mortgage? In most cases, it shouldn’t.

    As long as you’re caught up on your payments and have made at least three months’ worth of mortgage payments after forbearance, Fannie Mae and Freddie Mac allow you to apply for a new mortgage or refinance your existing one after just three months.

    Generally, you are eligible for a new mortgage after forbearance, but the rules vary by lender. Ultimately, you won’t know if you’re currently eligible or when you’ll become eligible until you speak with your existing lender.

    Download the Griffin Gold app today!

    Take charge of your financial wellness and achieve your homeownership goals

    How Will Forbearance Affect Getting a New Mortgage

    One lending requirement all mortgage lenders share is your credit score, demonstrating your trustworthiness as a borrower. Forbearance can be beneficial for individuals struggling to make their monthly mortgage payments. However, since it shows up on your credit history, it may affect your ability to get a new mortgage.

    In most cases, forbearance won’t affect your credit score. However, missed payments during the forbearance period are technically late payments because you’re not adhering to the original mortgage loan agreement. Lenders aren’t required to report those payments to the major credit reporting bureaus, so you shouldn’t see a change in your credit score as long as you follow the terms in the forbearance agreement.

    While it’s not common, your lender can still choose to report missed payments as delinquencies, so we recommend talking to your lender before applying for forbearance to understand exactly how it will affect your credit score.

    In any case, even if forbearance does hurt your credit score because your lender reports your missed payments, it’s typically still better than having to foreclose.

    This is because when you enter the forbearance period, you’ll still be allowed to live in the home, and late payments will only stay on your credit report for three years. On the other hand, foreclosure stays on your credit report for seven years, making it much more difficult to obtain a loan in the future.

    How Long Do You Have to Wait to Refinance?

    Before COVID, borrowers typically had to wait at least one year after the end of forbearance to apply for a refinance loan, regardless of whether they had a conventional or Non-QM loan.

    How long you have to wait to refinance after forbearance largely depends on your loan. In general, you’ll have to wait anywhere from three to six months before applying for a new loan if you have a government-backed mortgage.

    However, it ultimately depends on the type of loan you have. For instance, you may need to make more consecutive payments to qualify for a new mortgage or refinance your existing loan.

    Meanwhile, for VA loans, there’s no waiting period for VA streamline refinance or VA cash-out refinance loans as long as the borrower can prove they can repay the loan and have recovered from the financial hardship they faced that led to forbearance. In these cases, you may be able to restore your VA entitlement by refinancing.

    However, other types of loans have different guidelines. For instance, FHA loan borrowers must make at least three consecutive payments after the forbearance period, but for a cash-out refinance, you’ll need to have 12 consecutive payments.

    If you’re unsure of the guidelines for your loan, reach out to your lender for more information. Getting this information before you enter a forbearance agreement can help you determine whether it’s the right option for you.

    How Forbearance Affects Other Aspects of Your Finances

    As we’ve mentioned, forbearance may or may not affect your credit score; it depends on whether lenders report missed payments during the forbearance period to the credit reporting bureaus. If your lender chooses to report these missed payments, even if you’re adhering to the forbearance agreement, it can lower your credit score, which will affect your ability to get a loan.

    Close-up of a person sitting on the couch with a blanket on while checking their credit report.

    Even if forbearance doesn’t affect your credit score, it shows up on your credit report. Therefore, future lenders and banks will see that you had forbearance at one point, which may make them consider you a higher-risk borrower.

    Additionally, entering forbearance means making higher payments later on. Your loan provider may give you repayment options, but you’ll still need to make up any payments you missed during the forbearance period.

    How to Get a New Mortgage After Forbearance

    So does forbearance affect getting a new mortgage? It can, but it ultimately depends on how it affects your credit score and finances. For instance, larger payments mean higher debts and a debt-to-income (DTI) ratio.

    That said, getting a mortgage after bankruptcy is much more challenging than getting one after forbearance since bankruptcy stays on your credit report for much longer than missed payments.

    Here are the steps to getting a new mortgage after forbearance:

    Talk to your mortgage provider

    The mortgage provider can help determine your eligibility for a new mortgage or refinance loan after forbearance. However, before you can get a new mortgage, you must exit your forbearance plan and make several consecutive payments.

    Get quotes

    Once you’ve determined you’re eligible for a new mortgage, you can get quotes from different lenders. If your credit score has decreased due to missed payments, you can still get loans with bad credit by finding the right lender. However, remember, the lower your credit score, the higher your interest rate, so it might be worth increasing your score before applying for a new mortgage.


    Once you’ve found a lender and are confident you can afford your new mortgage payments, you can complete an application and provide them with all the necessary documentation to prove your ability to repay the loan.

    Depending on your unique circumstances, explaining your forbearance situation to the lender might be worth it to assure them you’ve recovered financially.

    Refinance Your Loan with Griffin Funding

    You can refinance or get a new mortgage after forbearance, with little impact on your credit score and financial health.

    Griffin Funding is a premier provider of home loans for all types of borrowers. Whether you’ve been in forbearance or suffered financial hardship, we can help you find the right loan for your unique situation. Contact us today to learn more about your options–call 855-698-1098 or request a quote online.

    Interested in learning more?

    Get Started

    Frequently Asked Questions

    What are the pros and cons of loan forbearance?

    The most significant pro of loan forbearance is avoiding foreclosure while being able to continue living in your home. In addition, forbearance helps you address short-term financial hardship like job loss without significant financial consequences.

    On the other hand, the downside of loan forbearance is that your missed payments will accrue, which means paying more later.

    When did COVID forbearance end?

    COVID mortgage forbearance ended in September of 2021, but there are still options if you're still affected by the pandemic. Forbearance plans are still available, so you should talk to your mortgage provider as soon as possible, with many offering programs through 2023.

    What is the difference between deferment and forbearance?

    Many people use deferment and forbearance interchangeably, but they're not the same. Deferment is a type of forbearance loan repayment.

    For instance, if you can't afford higher monthly payments or a lump sum to catch up on mortgage payments, your lender may allow deferment in which you repay the missed payments when you sell the home or pay the loan in full.
    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.