While missing a mortgage payment is never in anyone’s plan, it can happen to homeowners for a myriad of reasons. Unfortunately, it’s on the rise, with 30 percent more homeowners behind on their mortgages in 2026 than in 2025. If you find yourself among this rising group of struggling homeowners, know that you’re not alone and you do have options. Ahead, learn more about what to do when you can’t pay your mortgage with help from Adam Saab of loanDepot.
Common Reasons for Mortgage Hardship
Mortgage hardship often stems from:
- Job loss or reduction
- Divorce
- Serious illness or accidents
- Inflation and rising costs
- Natural disasters
Why Acting Fast Matters
Mortgage companies want to know if you’re struggling to pay, and the faster you notify them, the better. “Mortgage lenders often have programs to help customers who run into financial difficulties, and the earlier you communicate, the more options may be available,” Saab says. “Making that call can be uncomfortable, even embarrassing, but waiting usually limits the available options.”
First Steps to Take Immediately
You’ll want to first reach out to your mortgage servicer to let them know you’re struggling, then assess your finances to see what changes can be made going forward.
Contacting Your Mortgage Servicer
Call your mortgage servicer, preferably before you have a late or missed payment. This way, you can discover potential fixes before it impacts your credit.
Your mortgage servicer may or may not be the same company as your mortgage lender. Mortgage lenders approve and issue the loan, and some also manage the loan while it is active, while others transfer loan management to a mortgage servicer.
Assessing Your Financial Situation
Get a firm grasp on all of your finances, as this will help you and your mortgage servicer determine what, if any, programs or refinancing options may help you get back on track. Thoroughly review your income, debts and budget to understand if this is a temporary setback or a larger, more persistent problem. Identify any sellable assets and make cuts to household expenses as well.
Mortgage Relief Options
“Depending on the type of loan and your individual circumstances, there may be payment plans, forbearances, deferrals and modifications available,” Saab says. “Early communication and full disclosure of your situation is key to fleshing out the details on the plan that best suits you.”
- Payment plans: A structured plan created by the lender, payment plans allow you to pay the missed payment back over time, along with your regular monthly payment.
- Forbearance: This involves a temporary hold on payments due to extenuating circumstances, like job loss. Regular payments will resume at the end of the forbearance period, and you will still need to make up past payments.
- Deferrals: This relief option moves your missed payments to the end of the loan life, when you will presumably be able to pay them.
- Loan modifications: The lender can modify your current loan with the goal of lowering monthly payments. This is usually accomplished with a lower interest rate or extended loan terms. Refinancing the loan is also possible.
Alternatives to Foreclosure
If the above options don’t provide enough relief, there are still ways to avoid foreclosure. These all require lender approval, but most companies will work with you to avoid the foreclosure process. “Contrary to popular belief, the mortgage company does not want your home,” Saab says. “When a home goes to foreclosure sale, everyone loses, including the lender.” Alternatives to foreclosure include:
- Chapter 13 bankruptcy: If you have a source of regular income, chapter 13 bankruptcy restructures your debts and creates a three to five-year repayment plan. This type of bankruptcy prevents the lender from repossessing your home during this time, unless you fail to make payments on the plan.
- Short sale: To avoid foreclosure, a short sale allows you to sell the house for less than you owe on your mortgage. This must be lender-approved and will still damage your credit, but not as much as a foreclosure would. Short sales can also be difficult to execute and may take months to close.
- Deed-in-lieu of foreclosure: In this process, you transfer the deed to the lender, effectively giving up ownership while avoiding foreclosure. This prevents severe credit damage and allows the lender to resell the home and recoup their costs.
Government and Nonprofit Assistance Programs
While it’s always best to start with your mortgage company, there are other assistance programs that can also provide relief. “The Homeowners Assistance Fund is a federal program created to help homeowners avoid foreclosure. It is scheduled to run through September of 2026, or until funds run out. The federal government provides the funds, but the states administer the program,” Saab says. Check with your state’s HAF office for more information.
In addition, there may be city, town and church programs in your area that can offer counseling and even financial help. Try the Homeowner’s HOPE Hotline (888-995-HOPE), a service of the Homeowner Preservation Foundation, for free, independent counseling and advice.
About the Experts
- Adam Saab is executive vice president of servicing at loanDepot, a national, non-bank mortgage lender.
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The post You Have Options If You Can’t Make Your Mortgage Payment – What to Know appeared first on Family Handyman.
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