Can’t Cover the Mortgage? You’ve Got Options
Nothing tightens your chest quite like realizing you can’t make your mortgage this month. Maybe an unexpected medical bill wiped out your savings or you lost your job. Or maybe the rising cost of living finally pushed your budget past its breaking point.
Whatever the reason, falling behind on your mortgage is overwhelming. However, homeowners have far more options than they think, and the worst thing you can do is freeze and hope things magically get better. When you act early, you have choices. When you delay, those choices shrink quickly.
Here’s how you can take control and figure out the next best step for your situation.
- Call Your Lender Before Things Spiral
Your instinct might be to avoid your lender entirely. Many people do – mostly out of fear or embarrassment. But reaching out early often gives you the most flexibility.
Lenders don’t want to foreclose on your home. It’s expensive and time-consuming for them. They’d much rather work with you to find a way to keep payments flowing, even if it means adjusting the arrangement for a while.
When you call, explain your situation clearly and ask what hardship options are available. You might be surprised by what they offer – temporary forbearance, reduced payments, or even a pause on your loan while you get back on your feet.
- Look Into a Mortgage Modification
If the issue isn’t temporary but long-term – a permanent drop in income, a major life change, or a mortgage that no longer fits your reality – a loan modification may be your best path forward.
A modification isn’t a refinance. It’s a restructuring of your current mortgage to make it more affordable. Lenders might lower your interest rate, extend your loan term, or fold unpaid amounts into the balance so you can restart with a clean slate.
The downside is that modifications require lots of paperwork. You’ll need to show hardship, submit financial documents, and respond to requests quickly. But the pay-off for many homeowners is huge: a mortgage they can actually afford without drowning every month.
This is one option where having a housing counselor or bankruptcy attorney involved can help tremendously, especially if your lender is slow or you need help navigating the process.
- Consider Bankruptcy as a Strategic Reset
Most people think of bankruptcy as a last resort – and in many ways, it is. But it’s also one of the most powerful tools available when you’re trying to save your home.
If foreclosure is looming, bankruptcy can freeze everything through the automatic stay, which stops mortgage companies from pursuing collection actions. From there, your next move depends on which chapter you file:
- Chapter 7 gives you breathing room by wiping out unsecured debt like credit cards and medical bills. Without those monthly payments, the mortgage may suddenly become manageable again.
- Chapter 13 lets you catch up on missed mortgage payments over several years through a structured repayment plan while protecting your home from foreclosure.
Bankruptcy is ultimately about creating space to get your life back under control. For many homeowners, it’s the only reason they get to stay in their homes at all.
- Free Up Cash by Reducing Other Debt and Expenses
Not every mortgage crisis means the mortgage itself is the problem. Sometimes everything around it is squeezing the budget dry. There are credit card minimums, personal loans, medical bills, and subscription creep.
If you can unload or minimize those other expenses, the mortgage may become workable again. This might include negotiating credit card rates, consolidating high-interest debt, cutting unnecessary expenses, talking to utility companies about hardship programs, etc.
For some people, eliminating unsecured debt through bankruptcy is what opens the door to affording the mortgage again. Always remember that your mortgage payment doesn’t exist in a vacuum. Sometimes the solution is to adjust everything else around it.
- Explore Selling the Home Before Foreclosure Hits
Selling your home is rarely your first choice, but sometimes it’s the cleanest financial move you can make. If you have equity, a traditional sale lets you pay off the mortgage, walk away without damage to your credit, and start fresh somewhere more affordable.
Even if you’re underwater on the mortgage, you may still have options like a short sale or deed in lieu of foreclosure, both of which are gentler on your credit than a full foreclosure.
- Try Refinancing If You Still Qualify
Refinancing may not help if you’re already months behind, but if you see trouble coming and still have decent credit, lowering your interest rate or extending your loan term can bring your payment down significantly.
Many homeowners overlook refinancing because they assume they won’t qualify – or they wait until it’s too late. If your financial situation is about to change, a refinance before you miss payments could give you the breathing room you need.
You Have More Options Than You Think
When you’re staring down a missed mortgage payment, it’s easy to feel like your only choices are foreclosure or some kind of financial disaster. But that’s not the reality. You have a wide spectrum of tools and options available to you.
What you can’t do is wait and hope things magically improve. Mortgage trouble rarely fixes itself. Take a breath, assess your situation honestly, and choose a path that protects your finances.
