All Forum Posts by: Charles Montgomery

@Chris Mason 

Thank you Chris! You are the man! I was hoping you would comment on my post. I follow your posts all the time and I must say you give the best lending info on a consistent basis on this site. But I'm sure you and the rest here already know that!

Thanks for pointing out that lenders can be more restrictive than FHFA guidelines. I personally am not looking for new loans/refinances for the next few years but it's good to know it isn't as simple as 3 consecutive payments after forbearance ends to get a great rate on your next loan. Definitely a pitfall to watch out for!

Does anyone here actually disagree with my post and willing to back it up? @Account Closed ? Anyone? 

@Colby Hanley HAHA! You got that one right!

Wheres all the lenders on this forum?? I know there are lenders on here who can tell us if I'm right or a fool!

@Joe S.

Hey Joe! Please share why you think my post was not sound counsel? 

You are right and wrong. I do not have an agenda but simply wanted to share some information with other members. I have "more than one" property. I think if you had loans in forbearance and posted this information you would value your privacy and wouldn't want your lenders seeing this post either! Agree?

@Account Closed

Hey John! No I am not a professional in the lending space. 

BUT I'd like to clarify a few things that should have been more clear in my post!

I know the fed does not lend to us borrowers. I mis-typed and SHOULD have said: #1 The fed (FHFA) has DIRECTED lenders to NOT request lump sum payments from borrowers. Thanks for catching that I really should have been more clear!

I also should have noted that I was only referring to FANNIE AND FREDDIE backed mortgages (not jumbo). You are right, I do not know the rules or restrictions regarding forbearance on VA loans, USDA loans, etc. I was only referring to Fannie and Freddie. Another good clarification which I thank you for again!

As far as unintended consequences, the only one I can see is that I may not be able to get a new loan/refinance for a few years, even though the FHFA has directed otherwise. But I guess it wouldn't be called an "unintended consequence" if I knew them all right!

I welcome you to please share other unintended consequences and call out/correct anything that I stated that may be wrong. Please don't just shut down my entire idea! I don't want to be spreading mis-information! Thanks again!

Hi there Bigger Pockets!

You NEED to enter into forbearance. ASAP. NOW. You will read why below.

Most users on this site use 30 year loans. Now imagine if I offered you $10,000 today or $10,000 in 30 years. Which would you choose? What if I offered you $10,000 30 YEARS AGO? 

You would choose the 30 years ago option because $10,000 was worth much more 30 years ago than it is today. $10,000 will be worth much less 30 years in the future. 

If I were you (and I have already done this on ALL my mortgages) I would enter forbearance AS SOON AS POSSIBLE. Every dollar wasted today can be wasted 30 years from now instead. Yes I used the term "wasted". Why is money going into your mortgage payment being wasted?

#1 If you are in the beginning of your loan, MOST of your payment every single month is going straight to the bank as interest.

#2 Money you don't get to see again for 30 years might as well be considered "wasted" as well.

I would much rather pause all my loans for the full year the CARES act has given us, and use it to my advantage! 

Now all the critics will tell you the following:

#1 You might have to pay a lump sum at the end of the forbearance period for all missed payments.

#2 You won't be able to get a new loan or refinance until YEARS after the forbearance period ends.

BOTH OF THESE ASSUMPTIONS ARE FALSE

#1 The Fed has been directed to NOT request lump sum payments from borrowers. You either have a higher monthly payment for the rest of your loan period OR (more likely) a year will be added to your loan term where you keep paying the same amount (this is where I tell you your money is worth much less 31 years from now). 

If you are still worried about the 1% chance that you MAY have to pay a lump sum; simple! Just put your monthly mortgage payment into a separate account for a year and if you do encounter that scenario you will be prepared.

#2 You can get a new loan AND/OR refinance only 3 MONTHS after your forbearance ends! To be more specific, it is actually after 3 consecutive on-time payments after your forbearance ends where you will become eligible to apply for a new loan with NO repercussions or negative consequences of taking the forbearance. Check what the FHFA has published in regards to forbearance if you don't believe me!

Bonus #3! If you simply want to pay your loan off as quickly as possible so you do not want a "pause" on your loan. GO PAUSE YOUR LOAN. Why? Because if you save that one entire year of paused payments and your bank does not require the lump sum payment which is most likely, you can STILL put all of those saved mortgage payments towards your HOME LOAN and not a penny of it will go to interest! This can shave YEARS off your mortgage if done correctly.

So Bigger Pockets, go ahead and SAVE SOME MONEY!!! Use this money wisely as this is a once in a lifetime opportunity.

Please share anything I have missed below, ask questions, answer questions, etc. 

P.S. to anyone who might say that this strategy is wrong, banks are bleeding from forbearances, etc. I ask you this. 

REMEMBER '08? Who paid for THAT!