Refinance after forbearance is a topic that’s keeping a lot of homeowners up at night. Yes, you can often refinance after mortgage forbearance, but it’s not automatic. Lenders typically require borrowers to exit forbearance and make a certain number of on-time payments (often three) before becoming eligible to refinance. The specific rules can vary depending on the loan type (e.g., conventional, FHA loan, VA loan ) and the lender’s policies. Therefore, while forbearance offers temporary relief, refinance after forbearance necessitates demonstrating financial stability through consistent payments.
So, what’s holding people back from refinancing after a forbearance?
- Is your forbearance over?
- Did you catch up on your missed payments?
- Is your credit score looking decent?
- Did your income recover?
These are the questions lenders will slap on the table when you ask about refinance options after forbearance. If your forbearance has ended and you’ve made a solid 3 or more payments on time since then, you’ve got a shot. Let’s break into what you need to know right now, and how real homeowners are playing this beat.
How Lenders Are Treating Mortgage Forbearance People in 2024
The whole mortgage rates world saw a shift after 2020. Lenders had to adapt. Now they’re not immediately slamming the door on people who took forbearance. It’s not the red flag it used to be. Refinance after forbearance isn’t off the table, but they’re watching for:
- Recovery period: Usually 3 to 12 payments made after forbearance
- Repayment plan: Did you repay lump-sum? Spread out over time?
- Current loan status: Any missed payments since it ended?
If your mortgage is current now, and you’ve got a consistent income, you’re not some financial leper. You might even have better credit now than when you started if you played things right.
Fannie Mae, Freddie Mac, and FHA Rules Post-Forbearance
Here’s what’s cooking inside the lending playbooks:
| Loan Type | Post-Forbearance Refinance Requirement | Waiting Period |
|---|---|---|
| Fannie Mae / Freddie Mac | Must be current, 3 months of payments after forbearance | 3-6 months |
| FHA | Must complete forbearance plan and make 3 on-time payments | 3 months |
| VA Loans | Must be out of forbearance and current on payments | No fixed time, case-by-case |
| USDA Loans | Must resume repayments and be current | 3 months usually |
Lenders use these as the blueprint. They might add their own extra spice to it, too. So if you’re wondering whether you can refinance after forbearance, know this — your loan’s backed by rules, but real people are making decisions based on your recent activity.
What You Actually Need to Refinance After Forbearance
If you’re serious about locking in lower rates or switching loan types after forbearance, here’s what’s gotta be on lock:
- Mortgage should be current (on-time payments for at least 3 consecutive months)
- No active forbearance status — it has to be officially over
- Proof of consistent income
- Decent credit score — 620+ usually for conventional refi
- Equity in the home
Lenders are looking at your rebound, not your slip-up. Did you get back up and handle your money better now? That’s more attractive than someone who was perfect but now falling behind.
Real Example: Josh from Texas
Josh skipped six mortgage payments during the pandemic. Work got weird. He took the forbearance, caught up in 8 months by adding an extra $500/m to his payments, and built his credit from 615 to 675.
Now? He refinanced into a lower rate, shaved $320 a month off his payment, and used the savings to build an emergency fund.
How to Prep Like a Pro Before Refinancing After Forbearance
Don’t walk into a refinance meeting like it’s a surprise party. Prep like you’re pitching Shark Tank.
- Get your payment history down. Print statements. Prove you’re up-to-date.
- Improve your credit. Knock down balances. Settle old accounts. Pay on time.
- Stack up your income docs. W-2s, pay stubs, bank statements – make it easy for lenders to say yes.
- Know your home value. Pull comps or get a rough online estimate.
- Shop lenders who deal with post-forbearance cases.
Want to explore better mortgage strategies? You’ll want to check out other helpful blog posts at reAlpha to see how investors and homeowners are managing refis, income properties, and more.
FAQs About Refinance After Forbearance
Can I refinance immediately after forbearance?
You usually need to make 3 consistent on-time payments after exiting your forbearance plan. That’s the sweet spot most lenders look for.
Does forbearance ruin your chances of refinancing?
Nope. If you’re current now and re-established your payment track record, you’re very much in play. It’s about where you’re at now, not where you’ve been.
Does refinancing after forbearance hurt your credit?
Not really. In fact, it could help your credit by lowering your monthly payment and making it easier to manage debt. But shopping around for too many lenders too fast can ding it slightly.
Can I refinance with missed payments during forbearance?
Yes — as long as those missed payments were part of your approved forbearance plan. They’re not held against you the same way traditional missed payments would be.
Should I work with a mortgage broker post-forbearance?
If you’re unsure who’s friend or foe in refinancing, a solid broker can help you find lenders who are familiar with post-forbearance refinancing. But always understand their fees upfront.