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What to Do When You Can’t Pay Your Mortgage

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canstockphoto5161850Buying a home can be exciting, but it can also put a large financial strain on your budget. Working with a qualified mortgage counselor can ensure that you find an option that works for you and your budget. However, there may still be times when you just don’t have the funds to make your mortgage payment. If this happens to you, whether because of job loss or a major unexpected expense, here is what you need to know:

For Short-Term Problems

If you are facing short-term issues, your lender may be willing to work with you in order to develop what is called a forbearance agreement. Essentially, the lender agrees not to foreclose your home, and you make a plan in order to get on top of your payments and stay on top of them. This is usually the best plan if you have, for example, lost your job but are already starting a new one or if you had a major expense like a medical cost that prevented you from paying your mortgage.

Usually, one of these agreements requires you to pay an extra amount on top of the original price of your monthly mortgage payment, in order to pay back your lender for the payments you missed. This could take a couple of months, or it could take a couple of years, depending on how many payments were missed.

For Long-Term Problems

Sometimes, you lose your job and are not sure when you are going to be able to get another one, no matter how hard you are looking. Some people have to take a pay cut or are demoted, and find themselves with far less cash than they once had. If this is the case in your situation, this can cause a long-term problem, where you are not able to make your mortgage payments for several months or even years.

In some instances, making a modification to your mortgage for lower monthly payments is a good place to start. Don’t wait until your lender has had to send your account to collections. If you are upfront about your issues with your lender, they will usually be willing to work with you in order to find a solution that meets both of your needs.


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