Setting up autopay and payment options

Your DTI is a critical factor in the mortgage approval process because it directly indicates to lenders the level of risk you represent. A lower DTI shows you have a good balance between debt and income, suggesting you’re more likely to handle a new mortgage payment comfortably.

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.

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).

A Debt-to-Income Ratio (DTI) is a personal finance measure that compares the amount of debt you have to your overall income. Lenders use it to evaluate your ability to manage monthly payments and repay borrowed money.