Selling your Home While in Forbearance. Can I sell my House While in Forbearance?

Millions of Americans applied for mortgage forbearance during the start of the coronavirus pandemic. Many are still in it, since the CARES Act allowed for forbearance of up to 12 months without any requirements. Homeowners now wonder if they can sell a home in forbearance in Arizona or if they’re stuck in the home until the agreement ends. 

We walk you through the answer below. 

What is Forbearance? 


When you apply for forbearance or in the case of the pandemic, were automatically granted it, you don’t have to make mortgage payments during the agreement. If you go into a 12-month forbearance agreement, for example, you don’t have to make payments for 12 months. You can make payments if you’re able, but you aren’t at risk of foreclosure if you don’t. 

Once the agreement ends, you’ll owe the ‘back pay’ or the amount you didn’t pay during the agreement, plus interest and in some cases fees.  

What if you want to sell your home during that time? 

Can I sell My Home in Forbearance? 

In most cases, yes, you can sell your home in forbearance. There isn’t any part of the agreement stating you must stay in the home. Just know that any amount you didn’t pay is added to your total payoff including unpaid interest and fees. 

If you’re still having financial difficulty and your forbearance agreement is about to end, some lenders may extend it if you prove you’re selling the home. Lenders would rather wait and receive a full payoff than go through the foreclosure process, as they’d receive a much lower percentage of your outstanding balance from a foreclosure. 

Check Your Home Value First! 


Is a Short Sale Necessary? 

If you want to sell a home in forbearance in Arizona, you don’t have to go through the short sale process unless your home is worth less than what you owe. This happened a lot during the housing crisis, but is popping up periodically with the pandemic now too. 

If you get too far behind on your mortgage, the interest and fees can add up, making you upside down on your mortgage (you owe more than the home’s value). If you sold the house and only paid off what you received for it, you’d be on the hook for the remaining mortgage amount. If you don’t pay it, you'd have more credit problems. 

A short sale is an agreement with your lender. They agree to accept a lower amount and will report the mortgage paid as agreed. This has a smaller negative effect on your credit score. 


Start Here to get your home value,  Keep track of this weekly/Monthly if you are in forbearance.  You don't want to get to the point of owing more than your home is worth right?   


Questions?  Scott Schulte is available and can help you 623-293-2833


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