I was laid off and have been on forbearance plan, but I am now back to work. I have 220 months left on my mortgage and owe $90k at 5.25% interest rate. If I save, I could probably pay it off in like 5 – 10 yrs depending on how aggressively I save.
I have 3 options when ending my forbearance:
Pay it all back and resume like normal
Resume like normal, but put a lean on the house and I have to pay it all back in 220 months (life of the mortgage) or if I ever want to refinance, I’d have to pay it back
Covid Loan Modification – create a new 360 month loan with 3.25% interest rate and owe $200 less on my mortgage payment a month
I am leaning toward option 3 because it lowers my interest rate and there are no fees attached to this due to it being a COVID loan mod. Also, paying $200 less a month means an additional $2,400 saved per year (or $24,000 in 10 years), so it would help me pay off my loan even faster.