Options When You Can’t Afford Your Mortgage Payment

Life likes curveballs.

Even diligent savers are still susceptible to surprise medical costs, home repairs, and job loss. So if you suddenly find yourself unable to pay your monthly mortgage, you’re not alone.

It’s important, however, that you take proactive steps to deal with the problem. While you might understandably feel upset and afraid, you need to focus on practical solutions to avoid making your predicament worse.

Here are three steps you can take to stabilize your finances and living situation when you can’t make your mortgage:

1. Contact your lender ASAP
As soon as you know that you’re unable to pay your mortgage, contact your servicer. When you make the call, be prepared to explain your predicament, provide details about your income and expenses, and let your servicer know if the problem is temporary.

Fortunately, many mortgage servicers have programs to help borrowers avoid foreclosure. Plus, they may be able to offer you other payment options depending on your circumstances.

2. Explore loan modifications
Speaking of alternative payment options, speak to your servicer about possible loan modifications to ease your financial burden. For example, a refinance may provide some immediate relief by lowering your monthly payment. Of course, by refinancing you might also extend the life of the loan and possibly have to pay more over time, so keep that in mind.

3. Seek mortgage counseling
If you’re having trouble paying your mortgage, connect with a housing counselor approved by HUD (the Department of Housing and Urban Development). A certified counselor can let you know if you qualify for additional mortgage assistance programs beyond those offered by your lender.

Additionally, counselors can guide you through the process of working with your loan servicer, and help you create a budget, reduce credit card debt, and tackle other issues that may be causing you to struggle with your mortgage.