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What Should You Do if You Can't Pay Your Mortgage?

Tony Gilbert | July 06, 2023

Edited by Hannah Locklear

Summary: When you fall behind on your mortgage payments, you have options to avoid foreclosure (which begins after 120 days of missed payments). Some of these mortgage assistance options include forbearance, loan refinancing, repayment plans, government assistance programs, and short sales. If debt is making it hard to pay your mortgage, SoloSettle can help you resolve your debts and move on with life.

Are you struggling to make your mortgage payments? If so, you're not alone. Many people face financial difficulties at some point in their lives, and it can be overwhelming when you can't afford to pay your mortgage.

But don't panic just yet! You have options when addressing this situation and finding a solution that works for you. By taking proactive steps and exploring these options, you can find a way forward and regain control over your mortgage situation.

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Contact your loan servicer immediately

If you can’t make your mortgage payments, it's essential that you promptly reach out to your loan servicer for assistance.

To locate their contact number, refer to your monthly mortgage loan statement or consult the mortgage loan coupon book provided by your lender. If you don’t know the identity of your mortgage servicer, you can visit their website or seek help from a HUD-approved housing counseling agency.

When contacting your mortgage servicer, ensure all the necessary information is ready. Explain why you can’t make the payments and clarify whether the issue is temporary or permanent. You’ll need to provide information about your income, expenses, and other assets like funds held in bank accounts.

Many mortgage servicers offer programs designed specifically to prevent foreclosure. After evaluating your situation, they'll determine the available options for you. They might request that you complete a mortgage assistance application to proceed further.

Once they review your application, they'll inform you about the potential loan modification they can provide, if any are available.

Consider these mortgage assistance options

Your lender has to give you information on how to apply for mortgage assistance within 45 days of your initial missed payment. However, you don't have to wait—initiate the application process early by contacting your lender.

If you fall 120 days behind on your payments without submitting a complete mortgage assistance application, the foreclosure process can begin, so make sure you get it done quickly.

To start the mortgage assistance application, you need to provide updated copies of the income and the financial documents initially submitted when applying for your mortgage. Your lender will evaluate your application and may request any missing or additional information. They will then explore foreclosure prevention options for you. Here are some of the different options your lender may offer you:

  • Forbearance
  • Loan refinancing
  • Repayment plans
  • Government assistance programs
  • Short sales

Now, let’s take a closer look at these options.


Forbearance can provide temporary relief by reducing or suspending your monthly payments until you regain stability. This option is especially helpful for short-term setbacks that you can recover from quickly, such as job loss or medical expenses.

When going forward with a forbearance plan, here are the two most important things to remember:

  1. Understand the repayment plan: While mortgage forbearance allows for a temporary pause on payments, it's important to remember that these missed payments will eventually need to be repaid. Work with your lender to establish a feasible repayment plan that suits your financial capabilities once the forbearance period ends.

  2. Stay informed about foreclosure proceedings: One of the benefits of entering into a mortgage forbearance agreement is that it typically prevents foreclosure actions during this time. Make sure to stay on top of any changes in regulations or policies related to foreclosure proceedings so you can take appropriate action if needed.

Mortgage forbearance can offer temporary relief and allow you time to recover financially, but you should consider all available options before deciding.

Loan refinancing

Securing a lower interest rate on your mortgage could provide much-needed relief and stability for your financial future. If you have good credit and at least 20% equity in your home, refinancing can be a viable option to make your monthly payments more manageable.

Refinancing a loan can take weeks or even months, so be prepared for the time and effort involved. Additionally, there may be origination fees associated with the new loan. If you have missed payments on your current loan, it could negatively impact your chances of approval for a new mortgage, so it's crucial to maintain timely payments and contact your loan servicer if you encounter any difficulties.

If you currently have an adjustable-rate mortgage (ARM), switching to a fixed-rate mortgage might be wise. While ARMs start with low monthly payments, they transition into adjustable rates tied to fluctuating interest rates after a specific period. This uncertainty can create financial stress if rates rise unexpectedly. If you switch to a fixed-rate mortgage, you can secure a stable interest rate that won't change over time. However, ensure there aren’t any prepayment penalties associated with your current ARM before pursuing this option.

Refinancing gives you the opportunity to improve the terms of your mortgage by obtaining a lower interest rate and potentially reducing monthly payments. Before making any decisions, thoroughly review the details of your contract and assess whether refinancing aligns with your budgetary needs and long-term financial goals. Seeking guidance from industry professionals can also help navigate the intricacies of refinancing options available to homeowners like yourself.

Repayment plans

A repayment plan offers the opportunity to bring your mortgage up to date later if you can’t make payments now. It involves an agreement with your mortgage company that allows you to repay the forbearance amount by making additional monthly payments alongside your regular mortgage payments.

This option proves beneficial when refinancing isn't feasible or if you just don’t want to refinance. As long as you've recovered from any financial hardships and can resume making regular monthly payments, a repayment plan lets you regain financial stability at a manageable pace.

To start a repayment plan, get in touch with your mortgage servicer. Together, you'll decide the monthly repayment amount, the duration of the repayment plan, and any other associated terms.

Government assistance programs

Government assistance programs offer support and options to homeowners who need financial relief. One notable program is the Making Home Affordable Program, which helps homeowners achieve long-term affordability for their monthly loan payments. Participating mortgage lenders nationwide provide various options, such as adjusting the interest rate, extending the loan term, and granting principal forbearance.

If you can’t pay your mortgage and your home is categorized as 'underwater,' meaning you owe more than its current value, an evaluation will automatically be conducted to determine if the principal can be reduced. To check if you're eligible for this arrangement, visit

In addition to this, it's important to reach out directly to your mortgage lender or servicer if you're struggling to pay your mortgage. They may be able to suggest other government assistance programs that could benefit you.

Remember, there are resources and support available through government assistance programs designed specifically for homeowners facing financial difficulties with their mortgages.

Short Sales

A short sale is typically the last option homeowners consider because it’s the most drastic.

You can sell your home for less than the remaining mortgage balance and potentially receive relocation assistance, and a short sale lets you avoid a foreclosure while finding a way out of your financial hardship.

Here are some reasons why a short sale could be a viable option for you:

  • Relief from the burden: Selling your home through a short sale can provide much-needed relief from the stress and pressure of being unable to pay your mortgage. It offers a chance to start fresh by freeing yourself from the weight of an unaffordable loan.

  • Minimized impact on credit: While any type of delinquency on your mortgage will have an impact on your credit report, going through a short sale can be less damaging than facing foreclosure. It shows lenders that you took proactive steps to resolve the situation rather than simply walking away.

  • Potential relocation assistance: In addition to selling your home for less than what is owed, some lenders offer relocation assistance as part of the short sale process. This financial aid can help cover moving expenses or provide support as you transition into more affordable housing options.

  • Faster recovery: Unlike foreclosure, which can leave long-lasting negative effects on your credit score, pursuing a short sale allows for quicker recovery financially. With time and responsible financial management, you may be able to rebuild your credit and regain control over your finances sooner.

By communicating with your lender and working together, you may be able to negotiate a reduced amount that satisfies both parties involved.

Remember, exploring alternatives like a short sale requires open communication with your lender and seeking professional advice from real estate agents or attorneys experienced in this area. They can guide you through the process, ensuring that all necessary paperwork is completed correctly and helping negotiate with buyers.

You have options for your mortgage

When you know you won’t be able to pay your mortgage, you need to take immediate action and explore all available options. Remember, you're not alone. Contact your loan servicer to discuss your circumstances to see if they can offer any assistance or guidance.

Taking proactive steps can make a significant difference in overcoming financial challenges and protecting yourself from foreclosure. Your journey towards stability begins with reaching out for help today.

Settle your debt

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If you’ve been sued for debt, especially debt related to a mortgage, debt settlement can help you avoid going to court and move on with your life. In a settlement, you offer the creditor a portion of the obligation in a lump-sum payment. If the creditor accepts your offer and signs an agreement that releases you from the remainder of the debt, it must drop the lawsuit against you.

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