Mortgage deferrals are not supposed to have any impact on one’s credit. However, they can be a red flag. The lender, as a result, may ask for troublesome documentation or even decline you if you have other red flags. Therefore, it is always critical to be transparent about all of your so-called “red flags” to minimize any surprises. You can come up with a good explanation as to why you have a deferral. To sum, there are multiple ways of getting around the red flag of a deferral, so it is important to be honest with yourself and your lender.
- If you’ve gotten a mortgage deferral, you should know that it will show up on your credit report.
- If applying for a loan afterwards, make sure you have an explanation and can prove that your income has come back.
- You should also make sure to not apply for a loan until after you’ve started paying your mortgage again.
“Mortgage deferrals aren’t supposed to hurt people’s credit scores but when a mainstream lender sees you’ve had a deferral, it’s nonetheless a red flag.”
Read more: https://www.ratespy.com/mortgage-deferral-warnings-061214104