After a few hours on the phone with our lender, I’m even more confused about what’s going on with our balance after the forbearance plan, so I’m hoping maybe someone here as some insight. Here’s a summary of the situation:
– In October 2017 we took out a 574.5K 30 year mortgage to finance our home
– In April 2020 we started a forbearance plan, as my freelance work had dramatically slowed down from COVID. At this point our principal balance was at around 549K after 2.5 years of payments
– After 6 unpaid months, my work picked back up so we asked to resume our payment in October 2020
– When we resumed payments, our principal balance went back to the exact same amount that it was 3 years earlier when we opened the mortgage (574.5K)
Now we are selling our house, and so I’m trying to understand why we have literally nothing to show (no paid off principal) for those first 2.5 years of making payments on time. The only explanation our lender has given is “when you didn’t pay for 6 months, we added that balance to your principal amount”. But to me, that makes it sound like we are paying for that amount twice, because it was already something that we were going to have to pay for in that 549K of principal. I’m also confused how the sum of those two came out to the exact amount of our original loan 3 years prior.
At the end of the day it just seems weird that our principal balance after 3 years had remained exactly the same as when we opened the loan. I get that we paused it for 6 of those months, but I’m not at all understanding why that means that the other 2.5 years of payments added up to nothing due to that 6 month pause.