Definitions

Repayment

re·pay·ment

A repayment plan is an official agreement with your lender to pay off any past-due mortgage payments and fees. It is commonly used to catch up on payment missed during forbearance. In a repayment plan, you’ll continue making your regular monthly payment, plus an additional amount to catch up on what you owe.

Reasons to consider it

  • It can be a great option for someone who experienced a temporary lapse in income, such as a job loss, but can now afford to pay extra to bring their loan current.
  • Your lender or servicer will waive late fees and agree not to proceed with foreclosure as long as you are making the agreed-upon payment.
  • It doesn’t alter your loan terms, such as extending the life of your loan.

Reasons to pause

  • Your monthly payments will be higher for a period of time until you pay off what you owe.
  • Your servicer will have a maximum amount of months they can offer a repayment plan for, typically six.
  • If you default on your repayments, it can be difficult to get a new repayment plan.

What does it look like?

  • Check your mortgage statement for the contact information for your loan servicer.
  • When you contact your servicer, ask to speak to your loss mitigation officer.
  • Explain why you fell behind. You may be asked to provide financial documents related to your income, taxes, mortgage, savings and other assets, along with other loans, and credit card or student loan debt.
  • It may help to demonstrate that you’ve made a good-faith effort to pay, for example by cutting unnecessary expenses.
  • You may be asked to fill out a Hardship Affidavit to officially document the problems you’re experiencing.
  • Work with your servicer to establish a repayment plan that works for you.
  • If during your repayment period you can’t afford to pay the amount needed to complete the plan, ask for more time or to be reviewed for a loan modification or other loss mitigation options.

Wondering if repayment is right for you? Here are some more resources to inform your decisions: