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Pre-qualification is a quick, informal estimate based on unverified information you provide. Pre-approval is a much more rigorous process where the lender checks your financial background and credit, giving you a definitive, conditional commitment that carries significant weight with sellers.

A recast involves making a large lump-sum payment toward your principal, after which your lender re-amortizes your loan. This lowers your monthly payment, but your interest rate and loan term remain the same. It typically has a low processing fee. A refinance replaces your existing mortgage with an entirely new loan, potentially with a new interest rate, term, and monthly payment. It involves full closing costs and is best for securing a lower interest rate.

The primary advantage is access to a large amount of cash at a relatively low interest rate compared to other financing options like personal loans or credit cards. Since the loan is secured by your home, the interest rate is typically lower than unsecured debt.

You will need to repay the missed amounts. You and your servicer will agree on a repayment plan before the forbearance ends. Common options include a repayment plan (adding a portion of the missed payments to your regular bills for a set time), a lump-sum payment (paying the full amount at once, which is less common), or a loan modification (permanently changing the loan terms, such as extending the loan term).