What term is used to describe a lender's temporary permission to suspend monthly mortgage payments?

Forbearance is the correct term used to describe a lender's temporary permission that allows borrowers to suspend their monthly mortgage payments. In situations where a borrower is experiencing financial hardship or temporary setbacks, a lender may agree to forbearance, permitting the borrower to pause or reduce their payments for a specified period. This arrangement helps borrowers avoid defaulting on their loans during challenging times, as it acknowledges their temporary difficulties while ensuring they can eventually resume regular payments.

Forbearance does not erase the debt; instead, the borrower is still responsible for repaying missed payments at a later date, often as a lump sum or through added payments after the forbearance period ends. Understanding this term is crucial for borrowers seeking relief during financial disruptions and significantly impacts their overall mortgage management strategy. Other terms like forgiveness or loan modification indicate different processes. Forgiveness refers to the permanent cancellation of a debt, while loan modification involves changing the original loan terms, such as interest rates or repayment periods. Forewarning typically pertains to advance notice about a potential issue, rather than a financial arrangement related to suspending payments.