can i get a home equity loan while in forbearance

Many homeowners facing financial difficulties may wonder if they can obtain a home equity loan while in forbearance. The answer to this question depends on various factors, including your lender’s policies, your financial situation, and the terms of your forbearance agreement. In this article, we will explore this topic in detail and provide you with a comprehensive understanding of the possibilities.

Understanding Home Equity Loans

Before we delve into the question at hand, it’s essential to clarify what a home equity loan is. Briefly put, a home equity loan is a type of loan that allows homeowners to borrow against the equity they’ve built in their property. The loan amount is typically determined by subtracting the outstanding mortgage balance from the home’s current appraised value.

Home equity loans often come with fixed interest rates and are repaid over a set term, typically ranging from five to 30 years. These loans can provide homeowners with a lump sum of money that they can use for various purposes, such as home renovations, debt consolidation, or covering unexpected expenses.

Possible Scenarios for Obtaining a Home Equity Loan in Forbearance

While it is generally more challenging to secure a home equity loan while in forbearance, it is not entirely impossible. There are a few different scenarios that may influence your eligibility, and it’s essential to consider them carefully:

  1. If you are currently in forbearance but have resumed making timely mortgage payments, some lenders may consider your application for a home equity loan.
  2. In cases where you have come out of forbearance and have a consistent payment history following the forbearance period, lenders may also be more open to considering your application.
  3. However, if you are still in forbearance and have not resumed making regular mortgage payments, it may be more challenging to qualify for a home equity loan. Lenders often prefer to see a stable financial situation before extending additional credit.

It’s crucial to remember that each lender will have its own policies regarding home equity loans during forbearance. It’s recommended to reach out to your specific lender to discuss your options and understand their requirements.

Factors to Consider When Applying for a Home Equity Loan in Forbearance

If you are contemplating applying for a home equity loan while in forbearance, there are several key factors to consider:

  • Financial Stability: Lenders will assess your financial stability to determine your ability to repay the loan. They may consider factors such as your employment status, income, credit score, and outstanding debts.
  • Equity Position: The amount of equity you have in your home will significantly impact your chances of securing a home equity loan. Lenders generally require a minimum equity threshold before approving a loan.
  • Loan-to-Value Ratio: The loan-to-value ratio is the percentage of your home’s appraised value that the lender is willing to lend. Lenders usually have specific limits on this ratio, and it may vary depending on your creditworthiness and other factors.
  • Additional Documentation: Lenders may require additional documentation, such as proof of income, tax returns, and recent bank statements, to evaluate your loan application.

By considering these factors and ensuring you meet the necessary criteria, you can increase your chances of being approved for a home equity loan while in forbearance.

Alternatives to Home Equity Loans During Forbearance

In some cases, obtaining a home equity loan while in forbearance may not be feasible or advisable. However, there are alternative options that homeowners can explore:

  • Personal Loans: If you have a good credit score and a stable income, you may consider applying for a personal loan to meet your financial needs.
  • Credit Cards: Credit cards can provide short-term financing for urgent expenses. However, it’s important to use them responsibly and be aware of high interest rates.
  • Emergency Funds: If you have an emergency savings fund, it’s wise to use those funds instead of taking on additional debt.
  • Discussing Options with Your Lender: Reach out to your lender to discuss potential alternatives or modifications to your existing mortgage agreement.


While obtaining a home equity loan while in forbearance may present challenges, it is not entirely impossible. The outcome will depend on various factors, including your lender’s policies, your financial stability, and the particulars of your forbearance agreement. It’s crucial to explore your options, consider alternative solutions, and consult with professionals to make informed decisions. Always remember to discuss your specific circumstances and eligibility with your lender before moving forward.