If you have the funds to repay missed mortgage payments, as well as any associated fees and late charges, a reinstatement can allow you to bring your loan current and avoid foreclosure. A reinstatement typically requires you to pay a lump sum by a specific date to become current.
A reinstatement may make sense if you:
- Are recovering from a short-term financial hardship.
- Are behind on your mortgage and have received a notice of default.
- Can demonstrate to your lender that you can repay your debts and afford your monthly mortgage payment.
Be aware that there may be late fees and other costs associated with a reinstatement plan.
Reinstatement is often combined with forbearance. Reinstatement makes sense when you can show that funds from a bonus, tax refund, new employment or other income source will become available at a specific time in the future.