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Can You Refinance a Mortgage in Forbearance?

By U.S. News & World Report

If you want to refinance your mortgage but you’re enrolled in a forbearance program, generally, you must first end the forbearance and meet certain conditions.

Refinancing involves paying off your original loan and taking out a new loan with new terms. If you can reduce your interest rate or lengthen your repayment period, your new mortgage payment may be easier to manage.

Canceling your mortgage forbearance plan and refinancing could put your home loan back on track. Here’s what you need to know.

[Read: Best Mortgage Refinance Lenders.]

What Is Mortgage Forbearance?

Mortgage forbearance is an agreement between you and your loan servicer or lender that temporarily pauses or reduces your mortgage payments. The bank also agrees not to start foreclosure proceedings during this time.

Forbearance agreements eventually end, though, and homeowners might be stuck with expensive mortgage payments just as they’re getting back on their feet.

“The homeowners will also need to make up the missed payments,” says Ed DeMarco, president of the Housing Policy Council, a trade group representing mortgage lenders and servicers. “These missed payments may be deferred to the end of their mortgage term or may be rolled into the mortgage balance.”

In these cases, a refinance might help. Refinancing “creates an opportunity for many homeowners to reduce their monthly mortgage payments or shorten their loan term, either of which may reduce risk for the borrower and the lender,” says DeMarco.

Can You Refinance a Mortgage in Forbearance?

If you have a loan backed by Fannie Mae or Freddie Mac, or by the FHA, USDA or VA, here is what you need to know:

— Fannie Mae or Freddie Mac. You’ll need to make three timely payments under a loan modification or repayment plan before you can refinance. Then you may refinance the entire loan amount, including any missed payments, into a new loan. You can use the online lookup tools for Fannie Mae and Freddie Mac to find out whether one of them owns your mortgage.

— FHA. Borrowers will need to exit forbearance to refinance. “But the requirements vary by loan program or by the individual lender or investor that holds the loan,” DeMarco says. If you want a rate-and-term FHA refinance, for example, you must first make three consecutive on-time payments. Streamline refinances also require a minimum of three consecutive payments, while cash-out refinances require at least 12 consecutive payments.

— USDA or VA. If your mortgage is backed by one of these agencies, call your mortgage servicer to see what your options are. You can look up your loan servicer using the Mortgage Electronic Registration Systems website.

[Read: Best Mortgage Lenders]

How Can You Qualify for a Refinance?

Borrowers can refinance after a forbearance, but only if they make timely mortgage payments following the forbearance period.

If you have ended your forbearance and made the required number of on-time payments, you can start the refinancing process. Here’s what you’ll want to do.

Assess Your Financial Standing

Eligibility for refinancing your mortgage depends largely on your financial situation. Lenders generally look for a credit score of at least 620, which falls in FICO’s fair range, and a debt-to-income ratio of no more than 43% for conventional loan refinancing.

Improve Your Credit Score

Here’s how:

— Always pay your bills on time.

— Pay down your debt. Using no more than 30% of the available credit on any card can help your credit score.

— Pull your credit reports for free from AnnualCreditReport.com and look for inaccuracies. You can dispute errors with the credit reporting agencies.

— If one of your friends or family members has a strong credit history, ask to be added to an account as an authorized user.

— Avoid applying for new credit, which can signal a worsening financial situation.

— Keep credit card accounts open to maintain the length of your credit history.

Contact Multiple Lenders

Compare interest rates, annual percentage rates, estimated monthly payments and closing costs. If interest rates are 1% lower or less than your current rate, refinancing could be wise.

The refinance might even work in your favor with a shorter loan term, especially if you’re getting rid of mortgage insurance. But if you’re unable to find interest rates lower than your current mortgage rate, you may have other options.

What Are Alternatives to a Refinance?

Refinancing isn’t the only option if you need a more manageable mortgage payment. Instead, you can request a loan modification, sell your home or stay in forbearance. You may also be able to receive help via homeowner assistance funds or supplements.

Here’s more about each of these choices.

Asking For a Loan Modification

This is an arrangement you make with your lender to change your loan terms permanently. The lender could lower your interest rate, lengthen your loan term, or, in rare cases, forgive some of your principal.

A loan modification might be a good option if you don’t qualify to refinance or can’t afford closing costs.

Selling Your Home

Consider your income and your expenses for the foreseeable future. If you think you’ll have trouble making payments because money is tight, but you have equity in your home, you might want to sell it to avoid a short sale or foreclosure.

But keep in mind that any payments missed during forbearance will probably be due once you sell the home.

Homeowner Assistance Fund

The Homeowner Assistance Fund was created to provide up to $10 billion in assistance to homeowners affected by COVID-19, which may include those with mortgages in forbearance. The program began accepting applications in 2022 and expires on Sept. 30, 2026, or when the funds run out. Some state programs are set to expire sooner, so check local eligibility requirements and availability.

FHA Loss Mitigation Option

The Department of Housing and Urban Development’s Payment Supplement program may be able to reduce your monthly mortgage payment for up to three years without the need for a loan modification. Contact your mortgage servicer to see whether this is an option for you.

Extending Forbearance

After three to six months in forbearance, evaluate whether you’re still financially struggling and then call your loan servicer to determine the next steps.

“The servicer may be able to extend the forbearance, but the homeowner must request such an extension,” DeMarco says. Extending forbearance might be a good idea if you can’t pay your bills and this option is still available to you. Just be sure you have a plan for eventually making up your missed payments.

After exiting mortgage forbearance, you may be able to defer those payments to the end of the loan term, create a payment plan with your loan servicer or modify your loan terms. You can also pay everything back in one lump sum, though your loan servicer can’t require you to.

Ultimately, the guidelines on forbearance and refinancing mean that homeowners don’t have to choose between short- and long-term mortgage relief. If you’ve entered forbearance, refinancing to a lower interest rate is still within reach and can give you more control over your financial future.

More from U.S. News

Is Mortgage Interest Tax Deductible?

What You Gain From Buying a Home That You Never Plan to Pay Off

How You Can Use Home Equity to Buy Another House

Can You Refinance a Mortgage in Forbearance? originally appeared on usnews.com

Update 02/26/26: This story was previously published at an earlier date and has been updated with new information.

Nigel Farage wins election in which his main rival was a trash can

By CNN
(CNN) — When voters in the English seaside constituency of Clacton went to the polls on Thursday, they ostensibly had more choice than in any other election in British history.Thirty-four candidates stood in this by-election, the equivalent of a US special election, making the ballot paper 3 feet long. But almost all the country’s half-dozen major political parties declined to participate, with only the populist hard-right Reform UK party fielding a candidate – its leader Nigel Farage.Farage was ultimately re-elected by a substantial margin, winning 22,239 votes. He had declined to attend the results ceremony, citing a police warning about a campaign to disrupt it.His main opponent, Count Binface – a self-described intergalactic space warrior dressed as a trash can – won a creditable 9,455 votes.But this election, rather than helping to solve Farage’s problems as he perhaps hoped, has only added to them.The country’s chief anti-immigrant activist and Brexit architect, Farage was already the member of parliament (MP) for Clacton but resigned from parliament – triggering the by-election – after facing unprecedented scrutiny over his finances. Those challenging him were Binface and 32 other fringe or novelty candidates.The spectacle promptly became an object of ridicule, derided as a “circus” by commentators, while the claims over Reform’s finances refuse to go away. At the same time, Farage faces both a split in his natural coalition of voters and a more formidable opponent in Britain’s new center-left prime minister, Andy Burnham. Such headwinds are unfamiliar for Reform, which had previously been in the ascendancy, leading national opinion polls and enjoying historic gains in local elections.Novelty candidatesFarage resigned as Clacton’s MP six weeks ago, as a steady drumbeat of allegations surrounding his and his party’s financing forced him to confront questions he hadn’t previously had to answer in his political career.He has consistently denied any wrongdoing, and said: “I’ve decided the people of Clacton should be the judges of my actions” when triggering the by-election.Farage sought to frame the contest as him taking on the establishment. But, said Tim Bale, a professor at Queen Mary University of London who studies right-wing politics, “it’s not worked because the other political parties … declared they wouldn’t stand, meaning the … framing has been him versus a bunch of novelty candidates.”And holding an election has opened Farage to criticism over its cost, which is expected to be around £250,000 ($338,000). The public is legally bound to pay that, despite Farage’s protestations that Reform would foot the bill.Before Farage resigned, he was facing an investigation by the parliamentary standards committee and that inquiry will resume now he has been re-elected. If it finds he breached parliamentary guidelines, that will trigger a process which could ultimately lead to another by-election. The other major parties would be expected to field candidates in that vote.Challenge from the rightWhile Farage is caught in this election spin-cycle, the grip he holds over his voter base is also faltering. Reform is now facing a challenge from its right flank as the newly established party Restore Britain – founded by former Reform MP Rupert Lowe – siphons off a small but significant portion of voters.Lowe, who has a longstanding feud with Farage, was forced out of the party last year and subsequently started his own, egged on by US billionaire businessman Elon Musk. Now sensing an opening, Lowe has sought to form an alliance with Farage, conditioned on Farage accepting some of Restore’s more extreme policies. Farage has not so far appeared keen to bury the hatchet.“A pact would be tricky because Restore’s policies are so extreme that adopting them would make Reform less attractive to voters who aren’t really into the whole far-right package,” Bale told CNN.All this comes against the backdrop of a new national government. Labour leader Burnham is more popular than his predecessor Keir Starmer and has already proven his ability to take on Reform during his successful return to parliament earlier this summer.In this by-election, Farage has only proven his ability to defeat an intergalactic space warrior with an upturned trash can on his head. Of course, Count Binface is not actually from space; he is a satirical character created by the comedian Jon Harvey, and has stood in several other elections.“Until August 13th, I want it to be absolutely clear that there is nowhere at all that matters to me more in the cosmos than Clacton,” he told CNN’s Max Foster from his “starship,” which he said he had transformed using a holodeck “to create the precise look of a budget hotel in Clacton.” Farage did not respond to an interview request from CNN.Binface’s manifesto is packed with national in-jokes, like promising to “cut your taxes, and raise everyone else’s,” nationalize the singer Adele and impose a “windfall tax on cosy crime novels written (or ‘written’) by celebrities.”Outlandish costumesBinface is just one in a long line of satirical candidates dating back more than six decades, who have become a unique staple of British elections. Almost anyone can run for parliament in the UK – only a £500 ($675) deposit and 10 supporters of the bid are needed – allowing for people to make their joke, or point, without too much trouble.The tradition took hold in 1963, when a young musician later known as Screaming Lord Sutch stood in a by-election. He would contest 41 parliamentary seats in all, including against three sitting prime ministers, and founded the Official Monster Raving Loony Party in 1982, according to its website.None of the party’s candidates — think Nick the Incredible Flying Brick and its current leader, Howling Laud Hope — have ever been elected to Westminster. But it inspired others to follow in its footsteps, and its three candidates in Clacton together took 61 votes.Behind the jokes, some campaigns have carried serious messages, like a man dressed as a fox advocating for animal rights who stood shoulder-to-shoulder with Burnham when the former Manchester mayor returned to parliament in June.Several of the late Sutch’s policies, such as lowering the voting age from 21 to 18 and legalizing commercial radio, were eventually enacted. Still, some have derided the spectacle of novelty candidates.As for Binface, his vow to be a unity candidate was not enough to win, despite his pre-vote bravado.The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
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