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.
Tip
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.