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What to do if you can’t pay your mortgage

Key takeaways

  • Being late or missing a mortgage payment could lead to late fees, a lower credit score, or even losing your home.
  • Working with your servicer and considering options, such as mortgage assistance programs, mortgage forbearance, and loan modification, could help you avoid the worst consequences.

If you experience a loss of income or an increase in expenses and think you may not be able to afford your mortgage payment, you can get help paying for your home. Here’s info about mortgage assistance programs and other options that could spare you from serious consequences for your credit history.

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What happens if you miss a mortgage payment?

Late and missed mortgage payments could trigger a fee from your mortgage servicer, the company that manages your loan. According to the US Department of Housing and Urban Development (HUD), if you default on your mortgage loan by not paying for 30 days past the due date, the mortgage servicer may also report this to the credit bureaus. That means the late payment could appear on your credit report and lower your credit score, potentially making it tougher to get low-interest-rate loans or qualify for other types of credit in the future.

As your payment due date gets further in the past, mortgage servicers follow a process to try to help the borrower—and get themselves paid. According to HUD, here’s what you can expect your servicer to do on this timeline:

  • 30 days past due: You might get reported to credit reporting companies.
  • 36 days past due: Your servicer is required to make live contact with you.
  • 45 days past due: Your servicer is required to help with assistance options and contact you in writing.
  • 121 days past due: Your loan could be referred to foreclosure attorneys unless you have an active loss mitigation application (more on that below).

What’s foreclosure? That’s when a lender takes possession of a home a borrower has failed to make payments on and then sells the home to recoup those loan payment losses. While specifics vary by state, foreclosure is typically what happens if a mortgage payer continues to miss payments on their mortgage. With Federal Housing Authority-insured mortgages, foreclosure happens after missed payments and the mortgage payer doesn’t use available mortgage assistance tools, says a HUD spokesperson.

Options if you can’t pay your mortgage:

Contact your lender as soon as possible

Find a contact number for your mortgage servicer on your monthly statement. Call to tell them that you need mortgage payment assistance. Your mortgage servicer will likely ask you to share financial documents and details about why you need help, as well as fill out a mortgage assistance application. For instance, if you missed a payment by more than 2 weeks—the standard grace period for avoiding late fees—ask the servicer to waive your late fee. They just might say yes, especially if you have a track record of on-time payments.

Contact a housing counselor to help apply for mortgage assistance

A free HUD-approved housing counselor can walk you through your mortgage assistance options and help prepare your application. ​According to a HUD spokesperson, “HUD’s loss mitigation programs for FHA-insured loans have a variety of options to prevent a possible foreclosure and help struggling homeowners retain their homes. All of FHA’s loss mitigation options are coordinated through the mortgage loan servicer.” You can find a local HUD-approved counseling agency by visiting or calling 800-569-4287.

Ask about programs that cover your payments

Some states have funds set up for qualifying residents that make payments to your loan servicer on your behalf for up to a certain amount. These funds tend to be tied to emergencies, such as natural disasters and COVID-19.

See if you can get a payment deferral

Some loan servicers allow borrowers to skip up to 2 months of payments interest-free and pay them at the end of their mortgage term.

Set up a mortgage forbearance plan

If you’re having money struggles now, but you expect they’ll improve in a few months—maybe you’re in between jobs but you start another one soon—a lender might approve a forbearance plan. That allows borrowers to submit lower payments for a set amount of time.

Consider a loan modification

If you can’t afford your monthly payment amount and don’t expect your circumstances to change in the near future—maybe you split from a partner who shared the bills—a lender might work with you on a loan modification, which could reduce your monthly payments for a longer period of time than forbearance (though it wouldn’t lower your overall loan amount). You might have to do a trial period first to prove you can make lower payments on time.

Sell your home

Short sale

If you can’t make your monthly payment and your mortgage balance is higher than your home’s value, your lender might agree to a short sale. You would get to manage the selling process, and when you work out the terms of the sale price, you can negotiate to ensure the sale price covers the remaining mortgage owed.

Deed in lieu of foreclosure

If you don’t want to be involved in selling your home, you might offer the lender the deed to your home instead of going into foreclosure. You’d be giving up ownership of your place to the mortgage lender, but you'd get mortgage debt relief.

How to avoid being unable to pay your mortgage

Understand how much house you can afford

Home expenses don’t end with your mortgage payment. There are property taxes, utilities, maintenance, and more. That’s why Fidelity suggests looking for homes with a sale price of 3 to 5 times your household’s annual income. If you have no other debts, you could aim for closer to 5 times. But if you have student loans, credit card debt, or other debt, stick to 3 times your income.

Build up your emergency savings

Because you don’t have a crystal ball that can predict when and how serious your financial struggles might be, Fidelity suggests setting aside emergency savings to help you pay your necessary bills, including your mortgage, even if you lose income for a while. Start by saving at least $1,000 and then work toward a goal of at least 3 to 6 months’ worth of essential monthly expenses. Your emergency savings will also buy time to discuss your mortgage options with a counselor and set up a plan before you go into default or foreclosure.

Can’t make other payments? Get steps to help cover those bills and more in the Fidelity Smart MoneySM Playbook: How to help crisis-proof your life.

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