Can I Refinance a Mortgage on a COVID Forbearance Plan?

Mortgage and Lending with Guaranteed Rate, Marin County, CA NMLS: 22343

Can I Refinance a Mortgage on a COVID Forbearance Plan?


Back at the end of the first quarter of 2020, the president might still have wanted to downplay COVID, but many real American homeowners suddenly found themselves in dire financial straits and quickly took advantage of the forbearance plans offered by the servicers of their mortgages.  This payment relief allowed them to navigate the most uncertain and immediate impacts of the pandemic and for some, provided a bridge to re-employment and/or firmer financial footing.  Now that some of these borrowers have made readjustments to the new normal, they may wish to take advantage of the historic low interest rates that have stemmed largely from the Federal Reserve's response to this same pandemic.  So can a borrower refinance if there has been a forbearance or deferral on the current loan?  Let's examine the options available today if the borrower has a conforming/conventional loan.  Jumbo loans and government loans (FHA and VA) behave differently and I'll cover those in a separate post.  But here's what we need to know today:


  • If you are or were in forbearance with no missed payments, then we must verify that all payments were made to terms of the agreement AND the payoff of the existing loan cannot include any funds due. 
  • If you were in forbearance, had missed payment but brought them current prior to making your refinance application, then we just need verification that your mortgage is current and no funds due to complete any reinstatement are included in the loan's payoff.
  • If you were in forbearance, had missed payments and brought them current after making your refinance application, then we need verification that your mortgage is now current and we need to source the funds used to bring the loan to that status.
  • If you have a plan for payment deferral then you must provide a copy of the agreement issued by your servicer and you must have made at least 3 consecutive payments following the effective date of the deferral agreement.  The payoff of the loan can, in this case, be used to satisfy the full amount of the mortgage, including the payments deferred.


The low rate environment that exists today is unprecedented, a lot like the adjustments we're all being required to make as we confront our new reality.  If you've taken advantage of the forbearance or deferral agreements available to you, and have adhered to the terms, there's a good chance you can refinance your conforming or high-balance conforming mortgage today at historic low rates.  You'd be incorrect to assume otherwise.  Get in touch if you think we can help. 


Mask it or casket,


Rob Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959


Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.


Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 - (866) 934-7283

Comments (21)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great question, Rob... and I had no clue as to the answers... of course, not until I read your post. Really important information for many.

Sep 22, 2020 09:45 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Rob is is good information and hopefully these homeowners take advantage of the low rates we have right now.

Sep 22, 2020 04:11 PM
John Juarez
The Medford Real Estate Team - Fremont, CA

Bottom line is to talk to an experienced mortgage professional such as Rob Espinoas and see if it makes sense and if you can refinance your mortgage and take advantage of the historic low rate environment that exists today.

Sep 22, 2020 08:03 PM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hello Rob, very valuable report about refinancing a mortgage on a Covid forbearance plan.

Sep 22, 2020 08:07 PM
Peter Mohylsky. Broker Associate
Miramar Beach - Santa Rosa Beach, FL

Thanks for sharing this information, it should be interesting to see how this develops. 

Sep 23, 2020 04:04 AM
Erik Hiss
Keller Williams Capital Partners Realty - Worthington, OH
You can trust me for all your real estate needs!

Great, thanks for the info. Luckily none of my clients have asked me about this, but good to know.

Sep 23, 2020 05:49 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Starting your blog with a politcal statement could alienate half of your future business. On a business note, i am meeting many home owners that are in forebearance whose amounts are coming due in full, and can not pay. They are selling instead to cash in on their equity. 

Sep 23, 2020 06:44 AM
Rob Spinosa

I both value your advice and feel confident that the half that might be alienated will at least appreciate that I called it like it is.  And note that if there is a deferral (where the servicer has agreed to "tack" the missed payments onto the end of the loan), it's still possible to refinance if the terms of the agreement have been upheld.  Your clients may choose to sell for other reasons, but it may also be possible for them to refi and keep the home.

Sep 23, 2020 08:13 AM
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Interesting information that is helpful to know. Expressing facts, in my opinion is not expressing a political statement. I think this is information many homeowners will be pleased to know as they examine options.

Sep 23, 2020 10:47 AM
Lynn B. Friedman CRS Atlanta, GA 404-939-2727
Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Rob Spinosa 
Thanks for the through answer to the COVID refinance question.
Always best to know the FACTS for a serious situation.
All the best - Lynn

Sep 23, 2020 02:34 PM
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Great information, thanks!

Sep 23, 2020 07:30 PM
Lindsay Reagan, Realtor
Bowen Realty - Wellington, FL

We can tell who you are voting for...

Sep 23, 2020 08:23 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Insightful and invaluable information post. Fortunately, very few I know used the forbearance option, however, if the payment missed was added on to the back end, why would the property owner have to make up the missed payments? The mortgage balance would simply be the sum of missed payments plus any fees and the current balance at the time of refinance, wouldn't it? 

BTW, our Constitution guarantees our freedom of speech, so, your political views shouldn't alienate people from receiving invaluable information. I may not agree with your politics but when applicable, I certainly would use your information. 

Sep 24, 2020 12:06 AM
Rob Spinosa

@KimoJarrett, mortgage lending guidelines weigh very heavily housing payment history, whether it is rent prior to owning or mortgage history if refinancing.  When you have a forbearance or deferral that allowed the homeowner to not pay as agreed, any new creditor must take into consideration how they view this as a credit risk and in the case of our industry's secondary market, must determine if a saleable loan can be delivered to the financial markets after funding.  So at least on conforming loans, we are seeing that if payments have been "tacked on" at the end, it may be permissible so long as the deferral agreement was followed.  In the case of a forebearance, however, in the vast majority of scenarios the balance must be brought current in order to close.  This sum can be problematic for the refinancing client, so they need to know up front what will be expected.

Sep 24, 2020 07:31 AM
Margaret Mitchell
Coldwell Banker Yorke Realty - York, ME
Seacoast Maine & NH Real Estate

Very valuable post. At the start of the pandemic, we zoomed with a local lender to discuss the implications of forbearance on credit applications for our clients. This update is hugely helpful.  Thank you for that.

Sep 24, 2020 04:05 AM
Carol Culkin
Diamond Partners Inc - Overland Park, KS
Overland Park Residential Real Estate

Thank you for this great piece of information. It all makes sense.  

Sep 24, 2020 05:28 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Thank you for this information! 

Sep 24, 2020 05:34 AM
Mike McCann - Nebraska Farm Land Broker
Mike McCann - Broker, Mach1 Realty Farmland Broker-Auctioneer Serving Rural Nebraska - Kearney, NE
Farm Land For Sale 308-627-3700 or 800-241-3940

I guess Kimo said it best. My advice on this platform is never open or close with a political statement and leave them alone in the middle as well. 

Have a great weekend!! 

Sep 24, 2020 06:27 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Rob, this is great information to share with current homeowners. I know a few people who had to do forebearances, and one just asked me about refinancing since she has been back to work. I told her to call her lender, but I plan to send her this post too! Thank you!

Sep 24, 2020 08:33 AM
Kris Collis, Associate Broker
Smart Way America Realty - East Stroudsburg, PA
Professional Results you Expect 570-801-5525

Rob, this post is a great example of sharing information very useful and informative for realtors from a trusted lender.

Sep 24, 2020 09:49 AM
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

Grateful to live in an area where no one I know of  used the covid forbearance.  And all of our tenants paid their rent!  We did have a couple of landlords who offered no rent if needed.  

Sep 24, 2020 11:42 AM
Mimi Foster
Falcon Property Solutions - Colorado Springs, CO
Voted Colorado Springs Best Realtor

What about sales? Is there anything that would preclude the sale of a home that's been in forebearance?

Sep 25, 2020 07:42 AM