Does mortgage forbearance affect refinancing?

As a homeowner, you don’t expect to fall behind on your mortgage. But a job loss or unforeseen expense can sometimes make payments hard to manage. Staying in touch with your mortgage servicer can help you find the right path forward, which may include forbearance.

If you’re in forbearance now, or were in the past, you’re probably wondering how it affects your credit and your ability to refinance your mortgage.¹ Most of the time, you can’t refinance while your payments are actively paused, but you may qualify once you exit forbearance, resolve your missed payments, and rebuild a track record of on-time payments.

Key takeaways:

• You might be able to refinance after a forbearance once your loan is current, or in specific instances like natural disaster forbearance.
• Your waiting period to refinance can range from no wait to several months of on-time payments, depending on your loan type and how you resolved your missed payments.
• Forbearance itself may not damage your credit, but missed payments before or during the plan can make refinancing harder.

Understanding forbearance

Forbearance is a pause or temporary reduction in your monthly mortgage payment during a period of hardship. Your servicer outlines the terms in a forbearance agreement, but forbearance typically provides short-term relief, often for 3 months. Any past-due payments and any payments missed during the forbearance period are due when it ends. Forbearance became a widely used tool for mortgage assistance in 2020.

However, not everyone qualifies for forbearance, and your servicer needs to approve it. You’ll want to be sure you can repay your missed or reduced payments once the pause ends. Forbearance isn’t right for everyone, especially if you’re struggling long-term. Repayment plans, loan modifications, partial claims, and payment deferrals are other options worth asking about, as different servicers allow different combinations.

Forbearance vs. deferment

Forbearance and deferment have similar meanings but aren’t the same when it comes to paying your mortgage.

• Forbearance: A temporary pause or lowering of your monthly payment. When forbearance ends, the missed payments must be repaid.
• Deferment: In a deferral, a limited number of missed payments gets pushed back to the end of your loan.

Can you refinance during or after forbearance?

Refinancing while your payments are still paused works differently than refinancing once you’ve exited forbearance and gotten your loan back on track, and lenders weigh more than just your forbearance status when deciding whether to approve you.

If you qualify for refinance, your options may include a cash-out or rate-and-term refinance if you’re applying for a conventional loan through Fannie Mae or Freddie Mac or a Jumbo Smart loan from Rocket Mortgage.

Can you refinance while payments are paused?

Typically, no. Because you’re making reduced payments or no payments, you cannot refinance until the loan is current. Many refinance programs require your existing mortgage to be current, and look at your recent mortgage payment history when determining eligibility. But being in forbearance doesn’t automatically mean your loan is delinquent or ineligible for refinancing. If you’re in forbearance but continue making your regular mortgage payments, you may still qualify, depending on your loan type and lender requirements.

Can you refinance after forbearance ends?

Often, yes. Once your forbearance ends and you’ve resolved any missed payments through your servicer, you might be able to refinance, as long as you meet your lender’s credit, income, and payment history requirements. Exactly how soon depends on your loan program, refinance type, recent mortgage payment history, and how the missed payments were resolved. If your forbearance was tied to a natural disaster, special disaster-related servicing or credit-reporting rules may apply.

What lenders may review before approving a refinance

Beyond your forbearance history, lenders typically look at your credit, debt-to-income ratio, your home equity or loan-to-value-ratio, the age of your current loan, and payment history. If you’ve also had a bankruptcy or foreclosure, that history factors in, too, and may come with its own waiting period before you can refinance after bankruptcy.

What happens when mortgage forbearance ends?

Forbearance pauses your payments, but it doesn’t erase what you owe. When the forbearance period ends, you’ll need to resolve any missed payments through a servicer-approved loss mitigation option before your refinance eligibility can improve. Your servicer typically reaches out at least 30 days before your forbearance ends to walk through which options fit your situation.

Reinstatement

With reinstatement, you repay everything you owe in a single lump-sum payment. Reinstatements are the fastest way to get back on track; they don’t require servicer approval, although you may need a reinstatement quote to pay the correct amount.

Repayment plan

A portion of what you owe gets added to your regular payment for a set number of months until you’re caught up. This works if your income has stabilized and you can afford the extra amount.

Payment deferral

Your missed payments move to the end of your loan that you repay only when you reach the end of the loan, sell, refinance, or pay off your mortgage. This is an option if you can resume your regular payment but can’t afford a monthly increase. It’s worth noting that not every mortgage investor offers this option, and you have to qualify. Speak with your servicer.

Loan modification

With a loan modification, your servicer permanently changes your loan terms, which could mean a lower rate, a longer term, or rolling missed payments into your balance, to bring your monthly payment down to something you can afford.

This is different from refinancing: a modification adjusts your existing loan through your current servicer to resolve a hardship. A refinance replaces your existing mortgage with a new loan, sometimes through a different lender, to get better terms once your finances are back on track.

Partial claim

For some FHA loans, a partial claim places your missed payments into a separate, interest-free loan that doesn’t require monthly payments until you sell, transfer the title, request certain types of refinancing, or pay off your primary mortgage.²

Does forbearance impact your credit score?

Mortgage servicers may report that an account is in forbearance to the major credit bureaus: Equifax®, Experian®, and TransUnion®. How that affects your credit score depends on how the account was reported and whether you miss any payments.

Natural disaster forbearances, along with those under the Servicemembers Civil Relief Act, may receive special credit reporting that could keep your score from being affected. According to the Mortgage Bankers Association, in March 2025 (the most recent data available), about 21% of loans in forbearance were there because of a natural disaster.

If your loan is in forbearance outside of one of the limited exceptions above, it will have an impact on your credit because it shows you’re not currently fulfilling the obligations of your contract with your lender. The credit impact of forbearance is influenced by your previous credit history as well, so it’s different for every individual.

Missed payments can stay on your credit report for up to 7 years, but the severity and recency of a late payment also matter: payments 60 – 90 days late tend to hurt a credit score more than 30-day late payments, though the impact can fade over time.

Because refinance approval depends heavily on credit history, a lower score from missed payments can make it harder to qualify or even affect the terms you’re offered – so it’s worth understanding how a refinance affects your credit before you apply.

How long after forbearance can you refinance?

Waiting periods vary by loan type and how you resolved your missed payments.

• Conventional loans: Fannie Mae and Freddie Mac no longer require a standard three-payment wait after forbearance. Fannie Mae now looks at whether your mortgage is current when you apply and might not accept a refinance if there have been payments over 60 days late within the past 12 months. Freddie Mac also looks at recent payment history, with requirements varying by refinance program.
• FHA loans: You might be able to refinance right away if you repaid your missed payments in full, depending on the type of refinance. Borrowers on a repayment plan generally need three consecutive on-time payments, while those with a loan modification will be asked for at least six payments.
• VA loans: Under VA loan forbearance guidelines, you might not have to wait to refinance if you stayed current on payments or fully reinstated. If you were on a repayment plan, you might need to make three consecutive on-time payments, while modified loans may require six payments plus 210 days from the first payment due date after modification.³
• USDA loans: Your existing USDA loan usually needs to be at least 180 days old and paid as agreed for the previous 180 days. If your forbearance involved missed payments or a default, you probably will need to rebuild 180 days of on-time payment history before refinancing.
• Cash-out refinance: Cash-out transactions often come with stricter requirements than a rate-and-term refinance, including longer payment histories and no recent delinquencies, so expect a longer wait than with a standard refinance. For FHA cash-out transactions specifically, 12 consecutive on-time payments after completing the forbearance plan are often required.

These are general guidelines, and your lender’s specific requirements may vary. Seasoning rules apply outside of forbearance too, so it also helps to know how soon after buying a house you can refinance in general as you plan your timeline.

How to refinance your mortgage after forbearance

Once you’re eligible, here’s the process for refinancing after forbearance.

Review your options with your mortgage servicer

Before you shop for a refinance, talk to your servicer about how your forbearance was resolved and whether any liens or deferred balances need to be addressed at closing.

Get current and keep up with post-forbearance payments

Forbearance doesn’t eliminate what you owe, so get up to date on any repayments and stay current going forward. Missing more payments could hurt your credit, which might already be lower if you had late payments. Keep in mind you might need a minimum number of on-time payments before you’re eligible to refinance after forbearance, as outlined above.

Work on your credit score

Forbearance itself may not be reported as a delinquency, especially if you were current when the agreement began. However, late payments made before entering forbearance might still appear on your credit report. A few strategies can help your score:

• Pay your bills on time and stay current on required payments.
• Avoid applying for unnecessary new credit.
• Pay down revolving debt, especially high credit card balances.

Keep debt in check

Lenders also look at your debt-to-income ratio (DTI), which compares your monthly debts to your gross monthly income. Front-end DTI, or housing expense ratio, covers your mortgage payment, including principal, interest, taxes, insurance, and any HOA fees. Back-end DTI adds in your other debts and is usually capped anywhere between 36% – 50%, though that number varies by lender, loan type, and other financial factors. Paying down debt before you apply to refinance may help you qualify and leave more room in your monthly budget.

Compare refinance options

Rate-and-term and cash-out refinances come with different requirements and payoffs, so compare lenders and loan terms against a list of questions to ask when refinancing before you apply. Look beyond the interest rate to compare monthly payments, closing costs, loan terms, and whether any deferred balance or lien must be repaid at closing.

Make sure you can afford the new loan

Run the numbers on your new estimated payment against your budget, and factor in closing costs and how long it takes to refinance a house as you plan around your forbearance timeline. Make sure the new payment leaves enough room for other bills and emergencies, especially if your finances are still recovering from the hardship that led to forbearance.

Pros and cons of mortgage forbearance

Forbearance can be a useful tool, but it’s not free money, and whether mortgage forbearance is a good idea depends on your situation. Here’s how the trade-offs break down.

Pros

• Provides temporary relief from payments when you can’t make your full payment.
• May be less damaging to your credit than missed payments or foreclosure.
• Offers multiple ways to resolve missed payments once the pause ends.

Cons

• Forbearance doesn’t erase what you owe. Any missed and upcoming payments must still be paid.
• Can still affect your credit score, depending on how it’s reported.
• May delay your ability to refinance until you meet payment and seasoning requirements.

Alternatives if you cannot refinance after forbearance

If you’re not yet eligible to refinance, or forbearance isn’t the right fit, you still have options for mortgage help. Alternatives to forbearance might look like:

• Repayment plan: Spread your missed payments across several months of higher payments.
• Loan modification: Work with your servicer to permanently adjust your rate, term, or other loan terms like payments.
• Partial claim: For eligible FHA loans and borrowers, move missed payments into a separate, interest-free subordinate lien.
• Payment deferral: Push missed payments to a deferred balance that’s generally due when you sell, refinance, pay off the mortgage, or reach the end of the loan.
• Contact your servicer: If you still can’t resume or keep up with monthly payments, reach out before you fall further behind. Understanding the difference between forbearance and foreclosure can help you see how much waiting too long can cost you.
• Sell your home: If keeping the house isn’t realistic, selling and using the proceeds to pay off your mortgage may be another option.

FAQ

Here are the answers to some of the common questions asked about forbearance.

Is extra interest charged during forbearance?

It depends on your loan and forbearance terms. Your regular mortgage interest may continue to accrue while payments are paused or reduced, although some programs waive certain fees or late charges. Ask your servicer how interest and fees will be handled during your plan.

Can I still make partial payments during forbearance?

You may be able to. Most forbearance plans allow partial and full payments, which can reduce the amount you’ll need to address later. Check with your servicer first to find out whether partial payments are accepted and how they’ll be applied. If accepted, even small payments can shrink your final balance and shorten your recovery timeline.

Will forbearance impact my ability to buy a home in the future?

It can, especially if you missed payments. A past forbearance doesn’t automatically prevent you from getting another mortgage, but lenders will look at your recent mortgage payment history when you apply. Depending on the loan program, you may need to make a certain number of on-time payments or reestablish a clean payment history before you can qualify to buy another home.

The bottom line: Refinancing after forbearance is possible with the right timeline

Forbearance can put refinancing on hold, but it doesn’t close the door permanently. Your first step is to exit forbearance, resolve the missed payments with your servicer, and complete any required stretch of on-time payments.

Getting approved, however, is only half the decision. A refinance should leave you in a better financial position after you account for the new rate and payment, closing costs, loan term, and any deferred balance that may need to be addressed. If the numbers don’t improve your budget or support a clear financial goal, waiting may make more sense than refinancing as soon as you become eligible.

If refinancing makes sense for your finances and you’re eligible after forbearance, explore your refinance options with Rocket Mortgage to see what might work for you.

¹Refinancing may increase finance charges over the life of the loan.

²Rocket Mortgage is not acting on behalf of FHA or HUD

³Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

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