Behind On Mortgage Payments: 6 Ways To Catch Up Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: On This Page
Katie Falkenberg/Getty Images September 14, 2022 Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Bankrate senior editor for mortgages Bill McGuire has been writing and editing for more than four decades at major newspapers, magazines and websites. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. With interest rates rising in an effort to curb inflation and recession fears escalating, you may find yourself worrying about what happens if you fall behind on your . The percentage of mortgages 30 or more days delinquent but not in foreclosure edged up to 1.89 percent in July 2022, according to data firm Black Knight. While the rate is relatively low, if we do end up in a full blown recession it will certainly skyrocket. If you’re falling behind on your mortgage payments because of blowing up your budget, or for other reasons, it’s important to seek help now. The first step is to contact your loan servicer to explain your situation. Many are reluctant to take this step because they are scared and intimidated–for good reason. Taking constructive action is important to avoid foreclosure. Here are six ways you can catch up when you’re behind on your mortgage.
1 Forbearance
Best for people facing a temporary hardship or loss of income
puts your mortgage on hold temporarily. The payments are suspended or reduced for a set period, and you agree to pay with a lump sum or through installments once the pause period ends. During the forbearance period, the record reflects that you’re current on your mortgage. This option tends to be the best fit for “people facing a short-term financial hardship or disruption of income,” says Matt Ribe, senior director of legislative affairs with the National Foundation for Credit Counseling (NFCC). “It’s simply a way to stall payments without being considered delinquent.” This option doesn’t involve underwriting or much work on the servicer’s part. The downside is you’ll pay more interest by effectively stretching out your mortgage term.
2 Repayment through installments or a lump sum
Best for people who are back on their financial feet and want to catch up
This is a way that homeowners can pay overdue payments after their financial situations improve–if servicers allow it. With a repayment plan, you make your regular payment amount, plus an additional amount, for as long as it takes to make up for the late payments. Of course, servicers must be convinced that your financial situation has improved to the point where you can handle a larger monthly obligation. “Sometimes dealing with a servicer can be difficult,” acknowledges Ira Rheingold, executive director of the . Yet, Rheingold says, a housing counselor, including those affiliated with the NFCC, can help you communicate with your servicer and understand your alternatives. This may be an option for homeowners who have remedied their financial problems and can handle an even larger monthly obligation. “It can work, but [you must] know your financial situation,” Rheingold cautions. If you can pay back mortgage payments in a lump sum, the servicer makes your account current and reinstates your loan. But fees may up the total. “You may need a lot of money to make that happen,” says Rheingold. The challenge is coming up with a big chunk of money. And borrowing it is probably not a good strategy if you’re just recovering from financial woes.
3
Best for people who have the money to resume payments but need help to catch up
A loan is almost like a . You get a new loan with a longer term or a lower interest rate. With a loan modification you can avoid another round of closing costs and a potentially higher interest rate you would get with a refinance. You can check current and estimate what a refinance would cost you with “It brings you current and funds a new payment level that’s affordable to you,” Ribe says. Loan servicers need to be convinced that your financial problems are behind you. “They want to make sure the borrower can afford that payment,” says Wolff. Typically, you have to meet some criteria, such as proving a financial or personal hardship. Some mortgage servicers will green-light a refinancing for financially troubled homeowners. A refi does require underwriting and some work on the servicer’s part. But the servicer already has all your documentation and “can do it fairly quickly and cheaply,” Rheingold says.
4 Same mortgage lower associated payments
Best for people who just need a slightly reduced payment to catch up
Another route is to seek to lower the costs associated with owning a home. Property insurance: Shop for a better price on your property insurance to reduce your total monthly home-related costs. Property tax abatement: Find out whether you’re eligible for property tax abatements in your area, says Rheingold. Especially for seniors, this can lower your monthly mortgage payout. Private Mortgage Insurance (PMI): Contact your lender and see if you have enough equity to get rid of (PMI). If you’re eligible to have it removed, you’ll see an immediate drop in your monthly payments. Keep in mind that PMI can sometimes be used to save your home if the servicer is threatening to foreclose. In this event, you can file a partial PMI claim. Rather than paying a full claim to your servicer to , the insurance company pays the servicer just enough to cover your missed payments. To see if this would work, read your PMI policy documents carefully or consult a real estate attorney.
5 Principal reduction
Best option if your lender will do it
This is when the servicer is able to reduce the principal on your loan, based on underwriting and the actual value of your home. This can reduce the amount you owe on the loan, so it can reduce your monthly payments. Principal reduction was used by many homeowners whose finances got clobbered by the financial crisis of 2008-2009. Fannie Mae and Freddie Mac do principal reductions, but not all servicers will, says Wolff, so ask your lender or servicer.
6 National and local assistance funds
Best for people who qualify
Nationally there is help available through the US Department of Housing and Urban Development’s and the , a $9.9 billion dollar fund created by President Joe Biden that is administered in all 50 states and D.C. In addition to national programs, some areas are rich in resources for struggling homeowners. One example is North Carolina, where an available resource includes the . Homeowners with a financial hardship can get help creating a repayment plan or have the NC Foreclosure Prevention Fund cover three years of mortgage payments while the homeowner retrains and gets a job in a new field, says Phyllis Caldwell-George, housing division director for , an affiliate of the NFCC. Check your state, county, city and any professional organizations like a union you may belong to and see what assistance programs are available. Take action
Foreclosures are more common than you think and being ashamed of falling behind on payments is not going to help you. As tempting as it is to ignore the problem and hope it goes away, that will not work. There are dozens of programs and laws in place to help you stay in your home. No matter how bad it’s gotten you must contact your lender right away and start the process to avoid foreclosure. You’ve been making payments diligently and a temporary hardship doesn’t have to make your family homeless. You deserve to stay in your home. Use the resources available to you, that’s what they’re there for. SHARE: Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Bankrate senior editor for mortgages Bill McGuire has been writing and editing for more than four decades at major newspapers, magazines and websites. Related Articles