What to Do If You're Struggling with Your Mortgage

If you’re like most people, your mortgage payment ranks as your most significant monthly expense. If you suffer a financial setback, then it’s not surprising that you’d struggle to make that payment. 

Say you lose your job. That sudden drop in your monthly income might make it challenging to cover your monthly mortgage payment until you find new employment. Or your employer may cut your salary. What was once an affordable monthly payment has now become a financial burden. 

You might be tempted to ignore the problem. But don’t. If you are struggling to make your mortgage payment on time each month, call your lender. Your lender might be able to work with you to devise a temporary solution, anything from pausing your monthly payments to extending the term of your loan to temporarily reducing the size of your payment. 

But if you ignore the problem and fall behind on your monthly payments? Your lender could start the foreclosure process. And that could end with your lender taking over ownership of your home. 

Possible solutions
No one wants that. You don’t want to lose your home. And your mortgage lender doesn’t want to own it. Lenders would much rather collect their payments each month than try to sell your home for a profit. 

Your lender might be able to provide you with a bit of financial relief if you are struggling to make your payments or if you’ve already fallen behind on payments. 

Your lender might extend your mortgage term. Say you are paying off a 15-year, fixed-rate loan. Your lender could turn that loan into a 30-year one. That would automatically reduce your monthly payment to an amount you can more easily afford. 

In other cases, your lender might temporarily pause your payments. If you lost your job and are looking for a replacement, your lender might agree to give you a two- or three-month break from making your payments. 

Others might temporarily reduce your interest rate. This, too, would result in a lower monthly payment. 

But if you don’t call your lender and ask for help? You’ll never know what options are available. 

Making your case
When you do call your lender, bring evidence of your financial setback. If you’ve lost your job, you might send a copy of your termination letter to your lender. If your monthly salary has taken a dip, provide copies of paycheck stubs or your bank account statements. If your medical bills are piling up, send copies of your medical provider statements to your lenders. 

The more evidence you can provide, the more likely it is that your lender will work with you to provide temporary relief. 

Your lender will also be more likely to work with you if you can prove that your financial emergency is only a temporary one. If you lost your job, you might need a lower mortgage payment only until you find new work. 

But whatever you do, don’t miss payments without contacting your lender first. If you do, you might lose your home.