4 Important Steps to Take if You’re Not Able to Pay Your Mortgage

Buying a house comes with excitement and a certain peace of mind, however, it can become a nightmare if you are unable to pay your mortgage.

pay mortgage

Missing payments on your mortgage can hurt your credit score and you also risk foreclosure on your home if you are unable to keep up with your mortgage.

Nevertheless, if you are having trouble keeping up with your mortgage there are some moves you can make to save your home.

On that note, here are four important steps to take if you’re not able to pay your mortgage.


If you don’t think you’ll be able to meet up with your mortgage payment temporarily due to some financial difficulties, it’s important to first contact your lender.

There’s a chance they will be willing and able to provide the support and guidance you need. This involves discussing your current finances and speculating on how long the financial difficulty will last.

Your lenders can give you a mortgage forbearance; this reduces and can even put a pause on your payments for up to 12 months until you can afford to start paying again.

If your request for forbearance is granted, it means they won’t foreclose on your home during that period.

Bear in mind that you will still be required to pay all suspended or late payments meant to have been paid during the forbearance either in large sums or through a repayment plan.

Modify Your Loan

A loan modification is a great step you can take if your mortgage payments are piling up. A loan modification simply means renegotiating the terms of your mortgage agreement with your lender to come up with a new payment plan that you can meet up with.

You are required to show your lender there are some changes in your financial capabilities that have rendered you unable to meet up with the current terms of your mortgage agreement. 

Your lender is under no obligation to modify your loan but if they agree they can choose to extend your payment period or even reduce your interest rate.

Refinance Your Mortgage

This is similar to a loan modification, the difference is that you initiate this as a solution while you’re still active with your payments. 

When you may have taken your mortgage, interest rates may have been high, but with changes in fiscal policies, interest rates may have dropped.

Refinancing your mortgage means you replace your old mortgage with a new one and lenders like loan depot can offer you a lower interest rate and longer payment options.

Typically, it’s advisable to refinance your home when you own 20% of your home equity, this way you will not be required to pay for insurance.

You can also opt for a cash-out refinance, this option lets you leverage the appreciated value of your home to get some extra cash to settle bills around the house in addition to paying off your existing mortgage.

However, you also need to take into cognizance the period before your refinance goes through as this process can sometimes take weeks to months. 

Rent Out Your Home 

A quick step you can take to help with your mortgage payments is to rent out your home. You can find a flatmate, roommate, or boarder and charge the person rent to live there. You can then use this rent to pay off your mortgage. 

However, renting out your home will open you up to new forms of property tax. Additionally, you will also have to pay more on property insurance and you may also have to revamp your home and invest some money into home maintenance.

Lastly, throughout the process of setting up your rental home, your lender will still require you to meet your mortgage payments.