According to a survey from LendingTree, most homeowners who have been approved for a mortgage forbearance may not need one. Of the 25% of homeowners surveyed that applied, 80% were approved for a forbearance. However, while the majority of people who applied were approved, only 5% said they wouldn’t have been able to pay their mortgage without forbearance. Another 72% of those who received forbearance reported feeling at least a little guilty about it.
Those who applied for forbearance differed along with gender, generational, and income divides. In general, women were less likely to apply for forbearance than men, with 10.2% of women and 37.8% of men surveyed applying because of the coronavirus pandemic. While men were far more likely to apply than women, approval rates between the genders were similar, with 75% of women and 81% of men being approved.
Younger homeowners were more likely to apply for a forbearance than older homeowners. About 36% of millennials and 35.1% of Gen Xers applied for forbearance. This is compared with just 3.5% of baby boomers. Of those who applied, 76% of millennials, 87.6% of Gen Xers and 76.9% of baby boomers were approved.
Of all the generations, millennials and Gen Xers were more likely to say that they wanted a break from payments. Notably, 71% of respondents from these age groups said they could’ve made their payment but just wanted a pause. An average of only 4.3% of millennials and Gen Xers said they wouldn’t have been able to pay their mortgages without forbearance.
While fewer baby boomers applied for forbearance, as older homeowners are more likely to own their homes outright or are closer to paying off their mortgages, those who did were in much greater need. In fact, 20% of baby boomers said they needed forbearance to avoid missing their monthly payment.
"Regardless of whether or not you need one, getting a forbearance may still be a good strategy for managing your personal finances," said Tendayi Kapfidze, VP, Chief Economist, LendingTree. "With uncertainty around how long the COVID-19 crisis will last and how deep its economic impact will be, preserving cash is a priority for many Americans. A mortgage forbearance temporarily removes mortgage payments from the equation. This pause can provide more wiggle room in homeowners’ budgets until the forbearance period ends."