Can You Pause Mortgage Payments While Selling Your Home

A woman in Fort Myers called me on a Tuesday morning, voice tight, trying not to cry. Her hours had been cut, her savings were gone, and the mortgage statement sitting on the kitchen table looked like a verdict. She’d heard she could pause payments but was terrified that doing so would lock her out of selling. She didn’t want sympathy. She wanted answers.

She’s not alone. A surprising number of homeowners find themselves caught between needing payment relief right now and needing to sell the house eventually, and they assume those two things can’t happen at the same time. They can. But the way it actually works is more layered than most resources let on.

Mortgage Forbearance and Selling: What You Need to Understand First

Earlier this spring, I worked with the Tran family in Knoxville, Tennessee. Their late father had owned the home for thirty years, and the garage alone held a lifetime of tools, fishing equipment, and three decades of accumulated stuff. Four siblings, four different opinions on timing, and a mortgage still accruing interest every single day. The forbearance their mother had entered before she passed was still active, and two of the siblings had no idea that was even possible while the property was in limbo. We got them sorted out, but the confusion they arrived with was completely understandable.

This kind of situation is more common than people think. According to the Mortgage Bankers Association’s March 2025 data, roughly 180,000 homeowners are currently in forbearance, representing about 0.36% of all mortgage loans nationwide. The good news: that number is far smaller than the pandemic peak, and most borrowers in forbearance today are dealing with genuinely temporary setbacks. About 76% of current forbearance cases trace back to hardships like job loss, divorce, disability, or a death in the family (not reckless spending or bad planning).

Forbearance and selling aren’t mutually exclusive. You can pursue both. But understanding what forbearance actually does to your loan, your equity, and your timeline is the difference between a clean exit and a chaotic one. Forbearance does not erase or reduce what you owe; every missed or reduced payment has to be repaid. The piece most homeowners don’t fully absorb until they’re staring at a payoff statement that looks higher than they expected.

What Is Mortgage Forbearance and How Does It Work?

The word “pause” is where sellers get into trouble. People picture forbearance as pressing a mute button on their loan, with the debt sitting quietly in the background until things improve. The interest clock keeps running the whole time.

Forbearance is a formal agreement with your lender to temporarily reduce or stop your mortgage payments for a set window, usually three to twelve months. The missed payments aren’t forgiven, and when the period ends, you repay them through a lump sum, a structured repayment plan, or a loan modification that folds the balance into the tail end of your loan. The debt didn’t disappear. It deferred.

If your loan is government-backed, such as an FHA, VA, USDA, or conventional loan through Fannie Mae or Freddie Mac, you can typically get an initial forbearance period of three to six months, with extensions possible up to twelve or eighteen months if the hardship continues. Private loans follow whatever the individual lender’s policy allows, which varies more widely and can be a frustrating moving target.

Servicers generally require you to call before you stop paying, not after. Make sure the approval is confirmed before you skip a payment; stopping without official approval turns missed payments into delinquencies, which carry real credit consequences. The forbearance plan is a written contract, so read every term before you sign off on it.

One important detail many homeowners overlook is that mortgage forbearance does not stop interest from accruing. While your payments may be temporarily paused or reduced, interest continues to accumulate on the remaining loan balance, increasing the amount you ultimately owe. If you’re planning to sell your house fast in Springfield, understanding your updated payoff balance is essential so you can accurately estimate your proceeds at closing and avoid unexpected surprises.

How Forbearance Impacts Your Credit Score and Future Mortgage Options

Three to eight points. Roughly that much is how far your credit score drops when you enter a properly structured forbearance, assuming you stick to the agreed terms and your lender reports the account in good standing. It’s nothing, but it’s also not a disaster.

As long as you follow your forbearance agreement, your lender should report your account as current rather than delinquent. The forbearance status itself may still show up on your credit report. Other lenders reviewing your file during or shortly after the relief period can factor that forbearance notation into their evaluation of your creditworthiness (and some scrutinize it more than others). So even if your score looks fine on paper, a future mortgage application can still face friction.

The bigger credit concern isn’t the forbearance itself. It’s what happens if a seller skips the formal process and simply stops paying. Going delinquent outside a formal forbearance agreement, or letting a servicer slide toward pre-foreclosure, does real damage. Foreclosure alone can drop a credit score by 100 to 160 points and stays on a credit report for seven years.

If you’re thinking about buying another home after selling, the waiting period matters. Most lenders require at least twelve months before approving a new home loan after a borrower has exited forbearance. Specific timelines vary by loan type and individual lender policy, so confirming with your next lender early in the process (before you’re under contract somewhere) saves you from late surprises.

One thing I keep seeing: sellers focus so much on the forbearance that they ignore the downstream mortgage application. Call your servicer and call a mortgage broker for your next place at the same time, so you know exactly where you stand on both ends (forbearance history shows up on that application).

Can You Sell Your House While in Mortgage Forbearance?

For years I assumed that a forbearance plan put some kind of hold on a homeowner’s ability to sell. It doesn’t. I was wrong about that, and I’ve been telling people the opposite ever since.

Selling a home during forbearance is permitted by every major servicer; the mortgage balance gets paid off from the sale proceeds at closing, and the forbearance ends automatically at that point. You don’t need special permission to list your home. You do need to tell your lender you’re selling so they can prepare an accurate payoff statement, and that figure will be higher than your original balance because it includes all deferred payments and any accrued interest.

Do you have equity? That’s the real question. If your home is worth more than the total you owe, including the forbearance balance, the sale process looks almost identical to any standard home sale. The sale proceeds go first toward paying off the full remaining mortgage balance, including anything deferred during forbearance, and whatever’s left after that belongs to you.

Sellers who are underwater, meaning they owe more than the property is currently worth, face harder choices. A short sale requires lender approval and takes time. Short sales typically run sixty to one hundred twenty days from start to close on average. A traditional sale with a cash buyer who closes fast can wrap up in as few as two weeks. This timing gap matters when a forbearance period is running out.

Buyers who figure out you’re in forbearance may push for a lower offer, perceiving you as motivated. This is a real dynamic, not a myth. Selling directly to a local buyer rather than going through a drawn-out listing process can sidestep some of that leverage.Naples Home Buyers works with homeowners in exactly this kind of situation, offering a straightforward sale without the public exposure that can invite lowball negotiations.

How Forbearance Affects Your Home Sale Price and Equity

What does the actual math look like when forbearance is in play?

The deferred payments don’t change your home’s market value at all. A buyer doesn’t care what you owe; they care what the house is worth to them. What forbearance does affect is how much of the sale price you actually walk away with. Every month of deferred payments, plus accumulating interest, shrinks the gap between what you gross on the sale and what you net.

The average U.S. homeowner lost roughly $9,200 in equity between the second quarter of 2024 and the second quarter of 2025, according to data from real estate analytics firm Cotality, though that still leaves the average homeowner holding about $307,000 in accumulated equity. Most sellers in forbearance have room to absorb the deferred balance and still come out with money in their pocket (more than they’d expect, in my experience). But that depends entirely on your specific loan balance, your local market value, and how long you’ve been in the forbearance plan.

Sellers sometimes get surprised at closing because the payoff statement looks higher than expected. Homeowners in forbearance regularly report shock at the payoff figure, because when all the paused payments are tallied alongside accrued interest, the loan balance appears to have jumped (I’ve watched sellers go pale at the table) even though it simply reflects everything that accumulated during the relief period.

Pull your payoff statement early, before you price the home. Pricing based on a stale balance estimate can blow up a deal at the finish line.

What Happens to Your Missed Payments When You Sell?

Picture this: you’re sitting across the kitchen table from me, and you ask, “So when I sell, where do all those months of unpaid payments go?” Here’s the honest answer: they don’t vanish. They wait at the title company.

If the terms of the forbearance plan allow a sale, the lender recovers the missed payments directly from the sale proceeds. The title company handling your closing collects the full payoff amount, which includes your original principal balance, all deferred payments, and any interest that piled up during the forbearance window (sometimes more than sellers expect). After the lender is paid in full, your remaining equity, minus closing costs, transfers to you.

Your lender needs to issue a formal payoff statement for this to work cleanly. The payoff statement spells out the complete amount owed: missed payments, accrued interest, any escrow shortages, and applicable fees. The document drives the closing. Delays in getting it can slow down your closing timeline, so request it as early as your lender will allow.

One more thing: if your home doesn’t generate enough from the sale to cover everything, you can’t just walk away from the remaining balance. You’d either need to bring cash to the closing table to cover the gap, or negotiate a short sale with your lender. Before listing as a short sale, your servicer or lender must formally approve the arrangement and agree to accept the reduced sale proceeds in lieu of foreclosure. The approval process takes time, sometimes weeks (I’ve seen it stretch longer than sellers expect), so start that conversation early if you suspect you’re underwater.

Pros and Cons of Selling Your Home During Forbearance

Selling during forbearance is almost always better than foreclosure. Full stop.

You keep more control than most homeowners expect. You preserve your equity, or at least as much of it as your current balance allows. Selling is the only option that actually eliminates the mortgage debt; forbearance and loan modification simply restructure it. A voluntary sale also gives you flexibility to negotiate terms, choose your buyer, and close on a schedule that makes sense for your situation.

The cons are equally real. Selling costs money even before forbearance is factored in. Agent commissions, title fees, and concessions can consume somewhere between six and ten percent of your sale price. Add the deferred balance on top and your net proceeds shrink further. Some buyers will sense urgency and bid accordingly.

Timing also works against you. Every additional month inside the forbearance plan adds interest to the pile. Sellers who wait and wait while hoping the market climbs sometimes discover their growing loan balance outpaces any price gains. Speed has real value in this scenario.

The deferred payment balance continues to increase while your home is on the market because interest and other deferred amounts may keep accumulating until the loan is paid off. The longer it takes to sell, the larger your payoff amount can become—a hidden expense that often catches homeowners by surprise when the final payoff statement is issued. If you want to avoid additional delays and mounting costs, we buy houses in Massachusetts for cash, providing a fast, straightforward sale that can help you close sooner and reduce the impact of a growing deferred balance.

Steps to Sell Your House While in Forbearance

One family came to me having already listed their home with an agent for three weeks before telling the agent they were in forbearance. The agent had priced the home without factoring in the full payoff amount. The first offer nearly collapsed at the title table.

Getting ahead of that starts with a call to your servicer before you take any other step. Tell them you’re considering a sale and request an up-to-date payoff statement that includes all deferred amounts and interest. That number is your anchor for everything that follows.

From there, get a realistic read on what your property is worth in its current condition. A real estate agent with distressed-sale experience can help, or you can get an offer directly from a local buyer. Either way, run the simple math: sale price minus payoff figure minus closing costs (order matters here, so don’t skip steps). That tells you whether a sale makes financial sense right now.

Once you decide to move forward, keep your lender informed throughout the process. They won’t stop the sale, but they may have specific requirements around timing and documentation. Your lender will require a formal payoff statement, your equity position will shape how the numbers work out, and your closing timeline may hinge on how quickly the servicer processes the request.

Naples Home Buyers can walk through the numbers with you at no cost or obligation if you’re in the Southwest Florida area. Getting a cash offer takes the uncertainty out of the pricing equation and can speed up the timeline considerably, which matters when interest is still accruing.

Alternatives to Selling Your Home During Forbearance

A loan modification doesn’t just adjust your payment for a few months. In some cases, it can permanently change your interest rate, extend your loan term, or roll the deferred balance into a new loan structure, which means your monthly payment going forward could actually be lower than what you paid before the hardship started. That’s a path many sellers don’t explore before pulling the trigger on a sale.

Refinancing is another option if your credit is intact and you have enough equity to qualify. A refinance can bring a lower interest rate or a reduced monthly payment, though your credit score, debt-to-income ratio, and equity position all factor into whether you’ll qualify. Lenders generally want to see that your forbearance has formally ended and that you’ve made at least a few consecutive on-time payments before they’ll approve a new loan.

Payment deferral works differently from a standard repayment plan. With a deferral, the missed payments move to the end of the loan as a balance due when you eventually sell or refinance, rather than being spread into your regular monthly payments. This option keeps your current payment the same (that matters more than it sounds), which can make staying in the home financially manageable while you stabilize.

If you’re behind on payments and feeling the pull of foreclosure, the Consumer Financial Protection Bureau offers free guidance on forbearance and loss mitigation options. HUD also maintains a network of certified housing counselors who can review your specific loan situation and help you weigh your choices without trying to sell you anything.

For FHA or VA borrowers, there are also partial claim programs that can move deferred amounts into a subordinate lien, preserving your monthly payment and shielding you from a lump-sum payoff obligation. A partial claim maintains your current monthly payment amount and shifts what you owe during forbearance to the back of the loan or into a separate loan attached to the property (think of it as a silent second), due when you sell or refinance.

Staying is a valid choice, especially if your income has stabilized and you want to preserve the long-term asset. Don’t let urgency push you into a sale that isn’t actually necessary.

Where to Find Help with Mortgage Forbearance

Sellers who try to sort this out alone, calling their servicer once, getting a confusing answer, and then guessing at the rest, often make expensive mistakes that better information would have prevented.

Your first call should go to your mortgage servicer. Not the bank’s main customer service line; specifically the loss mitigation or forbearance department. These teams handle distressed borrowers all day and can give you the actual terms of your plan, your current payoff figure, and your options going forward. Write down names and dates every time you talk to them, because those notes have saved sellers I’ve worked with when servicers later claimed something different.

The Federal Trade Commission’s consumer mortgage page is a straightforward resource for understanding your rights when you’re struggling with payments. No agenda, no upsell.

A real estate attorney is worth consulting if your situation involves potential short sales, judgments, or a complicated title. Short sales especially benefit from legal guidance because the lender negotiations can move in unexpected directions, and you want someone with real expertise reviewing any agreement before you sign.

Caroline Hernandez reached out to me on a Friday afternoon from Sarasota. She was three months into a divorce, her ex was off the mortgage but still technically on title, and she just wanted the whole thing handled cleanly so she could move forward. The house had a formal dining room she’d always hated, a pool, and a two-car garage full of her ex-husband’s tools he’d never come back to collect. Working with a local buyer cut through the legal tangle faster than a traditional listing would have because we coordinated directly with both attorneys and the servicer without the added noise of open houses and contingent offers. She closed on a Thursday, three weeks after our first conversation.

The best results often come from involving the right professionals as early as possible in the process. Whether you’re facing title issues, coordinating with multiple parties, or simply want to avoid unnecessary delays, having an experienced cash buyer can make a significant difference. Naples Home Buyers buys houses for cash, helping homeowners navigate complex sales with a faster, more straightforward closing process. Call us today to discuss your situation and receive a no-obligation cash offer.

Frequently Asked Questions

Can I Stop Paying My Mortgage When I’m Selling?

Stopping without a formal forbearance agreement is not a strategy. Your servicer will report missed payments as delinquent once they hit thirty days past due, and that damages your credit. If you’re having trouble making payments while waiting to sell, call your servicer and ask about a forbearance plan first. Once you’re formally approved, the sale proceeds will cover the missed amounts at closing.

What Is the 3-3-3 Rule for Mortgages?

The 3-3-3 rule is an informal guideline some lenders and financial planners use when evaluating borrower readiness: spend no more than three times your annual income on a home, put at least a 30% down payment, and keep your mortgage payment at or below 30% of your monthly income. It’s a useful rough framework, though most lenders today qualify borrowers using more flexible debt-to-income ratios and a range of loan programs that don’t require 30% down.

What Is the Hardest Month to Sell a House?

January tends to be the slowest month for home sales across most U.S. markets. Buyer traffic drops after the holidays, weather keeps people indoors in northern climates, and most families don’t want to move in the middle of a school year. If you’re selling during forbearance and have any flexibility on timing, late spring typically brings the strongest buyer demand and the best chance of multiple offers.

How Long Can You Pause Your Mortgage Payments?

Government-backed loans, including FHA, VA, USDA, and conventional loans backed by Fannie Mae or Freddie Mac, typically allow an initial forbearance period of three to six months, with the possibility of extensions up to twelve or eighteen months total if the hardship continues. Private loan terms vary by lender. Extensions don’t happen automatically; you have to actively request them and demonstrate that the financial hardship is ongoing.

If you’re in forbearance and trying to figure out whether selling makes sense for your situation, you don’t have to guess at the math. Reach out to Naples Home Buyers, and we’ll walk through the numbers with you, no pressure, no obligation. Sometimes selling is the right move. Sometimes it isn’t. We’ll tell you either way.