What to Do When You Can't Make Your Mortgage Payment
Where to start when a payment is at risk
If you cannot make your mortgage payment, contact your lender before the payment is due. Most lenders have programs that can pause, reduce, or restructure your payment without immediately damaging your credit. The longer you wait after a payment is missed, the fewer options remain open to you.
Your lender's loss mitigation department handles these situations. You can find the phone number on your mortgage statement or the back of any payment coupon. When you call, be ready to explain what happened — job loss, medical emergency, reduced hours — and whether the problem is temporary or ongoing. Lenders treat these differently.
Do not ignore the problem or assume you will lose your home immediately. Federal law requires lenders to work with you before starting foreclosure, and most have financial incentive to keep you in the home rather than foreclose.
Key Takeaways
- Contact your lender's loss mitigation department before your payment is due, not after, because options narrow once you miss a payment.
- Forbearance pauses or reduces payments temporarily, but the missed amount is usually added back later or due as a lump sum.
- Loan modification changes the terms of your mortgage permanently, lowering the payment by extending the loan or reducing the interest rate.
- If you are behind on payments, a HUD-approved housing counselor can review your situation for free and help you understand what your lender will and will not offer.
- Refinancing and selling are options only if you have equity and your credit is still workable, which may not be true if payments are already missed.
Forbearance: pausing or reducing payments temporarily
Forbearance is an agreement with your lender to pause or reduce your mortgage payment for a set period — usually three to twelve months. You are not forgiven the money; you are borrowing time. At the end of the forbearance period, you resume full payments, and the lender collects the missed amount either by adding it to future payments, demanding it as a lump sum, or extending your loan term.
Forbearance is fastest to arrange and requires the least paperwork. It works best when your hardship is temporary — you were laid off but have a job offer starting in three months, or you had an unexpected medical bill but your income will return to normal. If your problem is permanent (you are now part-time instead of full-time, or you are retired), forbearance only delays the crisis.
Ask your lender in writing what happens to the missed payments at the end of forbearance. Some lenders add the amount to your final payment; others spread it across the remaining months; others demand it in full. Get this in writing before you agree, because it determines whether forbearance actually solves your problem or just moves it forward.
Loan modification: changing the terms of your mortgage
Loan modification is a permanent change to your mortgage contract. The lender may lower your interest rate, extend the loan term (spreading payments over more years), reduce the principal balance, or some combination. The result is a lower monthly payment that stays lower for the life of the loan.
Modification takes longer than forbearance — usually two to four months — and requires more documentation. You will need recent pay stubs, tax returns, bank statements, and a detailed explanation of your financial situation. The lender uses this to decide whether you can afford a modified payment and whether modification makes business sense for them.
Not all borrowers are offered modification, and the terms vary widely. A lender might lower your rate by one percent or extend your loan by five years or both. The key is that modification is permanent: once approved, that is your new mortgage. If you later have income increase, you do not automatically go back to the old terms.
Getting help from a housing counselor
HUD (the U.S. Department of Housing and Urban Development) funds housing counselors in every state. These counselors are free, independent of your lender, and trained to review your specific situation. They can tell you which options your lender is likely to offer, help you gather documents, and sometimes negotiate on your behalf.
To find a counselor, call the HUD hotline at 1-800-569-4287 or visit HUD.gov and search for counseling agencies in your area. You can also dial 211 and ask for housing counseling. Counselors work by phone and in person. Many can start within a week.
A counselor cannot force your lender to modify your loan or offer forbearance, but they can tell you what you may have access to for and what to expect. They also know which lenders are more flexible and can help you understand the paperwork. If you are behind on payments or facing foreclosure, a counselor is worth the phone call.
Refinancing and selling: when these work and when they do not
Refinancing — taking out a new loan to pay off the old one — can lower your payment if interest rates have dropped or your credit has improved. But refinancing requires that you have equity in your home, that your credit score is still acceptable to a lender, and that you can pass a new underwriting process. If you have already missed payments, most lenders will not refinance you.
Selling the home and moving to something cheaper is an option if you have equity (the home is worth more than you owe) and you can sell quickly enough to avoid foreclosure. But selling takes time — usually 30 to 90 days — and you will owe realtor fees and closing costs. If you are already behind, you may not have that time.
Both refinancing and selling are worth exploring with a housing counselor, but they are not realistic for most people in immediate payment crisis. They work better as a longer-term plan if forbearance or modification buys you time to execute them.
What happens if you miss a payment
Missing a payment does not immediately trigger foreclosure. Federal law requires your lender to wait at least 120 days after you miss a payment before starting foreclosure proceedings. During that time, you can still contact your lender and work out forbearance or modification.
However, missing a payment damages your credit score immediately and stays on your credit report for seven years. It also gives your lender less reason to work with you — they may assume you cannot pay rather than will not pay. This is why contacting them before you miss a payment is so much more powerful than contacting them after.
If you receive a foreclosure notice, do not ignore it. The notice includes a deadline to respond. Contact a housing counselor or a foreclosure attorney immediately. Some states have laws that give you additional time or require the lender to prove they own the loan. An attorney can tell you what applies to you.
State and local programs that may help
Some states and cities run mortgage assistance programs, usually funded by federal money or settlement agreements with banks. These programs may pay part of your mortgage, cover back payments, or provide grants that do not have to be repaid. Availability and rules vary by location and change as funding runs out or is replenished.
Your housing counselor can tell you whether your state or city has an active program and whether you meet the requirements. You can also search your state's housing finance agency website — search "[your state] housing finance agency" — or call 211 and ask whether mortgage assistance is available in your area.
These programs are not may provide to exist or to have funding available when you need them. But they are worth checking, especially if you are facing a long-term income loss and forbearance alone will not solve your problem.
Frequently Asked Questions
Will forbearance hurt my credit score?
Forbearance itself does not report to credit bureaus if you make no payments during the forbearance period and you are current on all other debts. However, if you miss a payment before forbearance is approved, that missed payment will show on your credit report. The damage is less severe than a foreclosure, but it will lower your score.
Can my lender force me to accept a modification I do not want?
No. You can refuse any offer your lender makes. However, if you refuse modification and cannot make your regular payment, you will eventually fall behind and face foreclosure. A housing counselor can help you understand whether refusing makes sense in your situation.
What if I have a second mortgage or home equity line of credit?
You will need to work with both lenders separately. Your first mortgage lender handles forbearance or modification on the primary loan. The second lender has their own loss mitigation department. Some programs cover only the first mortgage, so ask each lender what they offer.
How long does loan modification take?
Most modifications take two to four months from application to approval, but this varies by lender. During this time, you may be asked to make a reduced payment or no payment at all. Ask your lender for a timeline and what you owe while the modification is being reviewed.
What if my lender says I do not may have access to for anything?
Get a second opinion from a housing counselor. Lenders sometimes deny options incorrectly or offer only one choice when others exist. A counselor can review your finances and tell you what you actually may have access to for, and sometimes they can advocate for you with the lender.