How long it will take to recover depends on the seriousness of the delinquency. The longer you go without bringing the account current, the greater the impact on your credit scores. If your goal is keep your home, there are several options to consider that might help you avoid foreclosure. Here are a few possible options Individuals facing serious financial hardship may find that staying in the home and continuing to make mortgage payments just isn't feasible.
If that's the case, you'll need to consider other options, such as:. Before entering into any agreement, be sure you understand how the account will be reported by your lender and what the financial implications will be. Consider seeking the guidance of a financial advisor who can help you better understand and navigate your options. The National Foundation for Credit Counseling is a good resource for locating a qualified counselor near you.
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This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. Mortgage assistance options like forbearance and loan modification can help you avoid foreclosure even if you can't afford your usual monthly mortgage payment. You don't need to wait until you've missed a payment or you're sure you won't be able to make one; call your lender if you are concerned about your ability to pay.
In general, the earlier you ask for mortgage assistance, the more choices you'll have. But to get advice specific to your mortgage, grab the phone. Here's what you should have ready when you call your lender:. An estimate of your current income and future income, if you anticipate that it may change. An estimate of your current expenses.
Your most recent mortgage statement. Mortgage forbearance can suspend or reduce your mortgage payments for a set period of time. You'll work with your lender to determine how long forbearance will last based on your situation. Whether you're paying a reduced amount or not making payments, interest will still accrue during forbearance. Some lenders will agree not to report forbearance to credit bureaus as long as you make on-time payments. Even if forbearance dings your credit score, it will cause less damage than a missed payment or foreclosure.
Miriam Caldwell has been writing about budgeting and personal finance basics since She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina.
Falling behind on your mortgage payments is different from not paying your rent, because it can have a bigger effect on your credit score. However, you do have several options—from a forbearance agreement , which can give you some time to work things out, to a deed in lieu of foreclosure if you can't salvage the situation.
Mortgage lenders usually offer a grace period on monthly payments. You typically have until the 15th of the month to make your payment without incurring any late fees or penalties. At that point, your lender will report your overdue payment to credit bureaus, and it will start to impact your credit score.
The actual legal process for this varies by state. The goal is for the lender to sell the property, using the proceeds to pay off your remaining mortgage balance. Contact your mortgage company right away to find out whether there are any programs available that might be of help to you. You might be able to qualify for a temporary payment reduction, or refinance for a lower payment, depending on where you live and whether you're past due on the loan.
You can also meet with a HUD housing counselor who can help you determine the best course of action as well as assist you with budgeting and other financial needs. Here are some other options:. A refinance might help if you can pay some—but not the full amount—of your payments.
You can usually lower your monthly payment if you refinance into a longer-term loan, although that will increase the amount of interest you'll pay over the life of the loan.
You might also try to find a way to increase your income. Taking on a second job or a side gig can help. Working a few temporary jobs can help you stay in your home and avoid falling behind if your problem is a temporary income issue. Taking in a roommate might also be an option, depending on your circumstances. This can involve a few steps:.
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