What Should You Do After Missing a Mortgage Payment?
Missed a mortgage payment? Learn the immediate steps you can take, the options your mortgage servicer may offer, and how to protect your home equity.
AVOIDING FORECLOSUREMORTGAGE OPTIONSHOMEOWNER FAQS
8/4/20263 min read
Missing a mortgage payment can feel overwhelming, but one missed payment does not mean that foreclosure is inevitable. Homeowners may have several possible options, especially when they communicate with their mortgage servicer early.
Here are the most important steps to take after missing—or realizing you may soon miss—a mortgage payment.
Contact Your Mortgage Servicer
Call the company listed on your monthly mortgage statement as soon as possible. Explain why the payment was missed, whether the hardship is temporary or ongoing, and when you believe you may be able to resume making payments.
Ask specifically about available loss-mitigation options. Depending on your loan, financial situation, and mortgage servicer, these could include a repayment plan, forbearance, payment deferral, or loan modification.
Do not ignore calls or letters from your mortgage servicer. Early communication can provide more time to understand your options.
Gather Your Financial Information
Your mortgage servicer may ask you to complete a mortgage-assistance application. Start gathering documents such as:
• Recent mortgage statements
• Bank statements
• Pay stubs or other income documentation
• Monthly household expenses
• Tax returns
• Homeowners insurance information
• A brief explanation of your financial hardship
Keeping these documents organized can make the review process easier and help prevent unnecessary delays.
Understand the Options That May Be Available
Every homeowner’s circumstances are different. Possible options may include:
Repayment plan: A portion of the missed payments is added to your regular monthly payments over an agreed period.
Forbearance: Your servicer may temporarily reduce or pause payments. Forbearance does not erase the amount owed, so make sure you understand how the missed payments will be handled afterward.
Payment deferral: In some situations, missed payments may be moved to the end of the loan or become due when the home is sold, refinanced, or the mortgage is otherwise paid off.
Loan modification: The terms of the mortgage may be changed to create a different payment structure. This could involve extending the loan term, changing the interest rate, or addressing the past-due balance in another way.
Traditional home sale: If the property has sufficient equity, selling may allow the homeowner to pay off the mortgage, cover selling expenses, and potentially retain the remaining equity.
Short sale: If the mortgage balance and selling expenses exceed the property’s expected sale proceeds, the mortgage servicer may consider approving a short sale.
The availability and terms of these options depend on the loan, investor requirements, mortgage servicer, and homeowner’s circumstances.
Review Your Home Equity
Understanding the property’s approximate market value and mortgage balance is an important part of evaluating your choices.
A homeowner with available equity may have more flexibility than they realize. A traditional sale could potentially pay off the mortgage and protect some or all of the remaining equity.
Request a current property-value and home-equity review before assuming that foreclosure or a short sale is the only possible outcome.
Keep Detailed Records
Create a simple record of every conversation with your mortgage company. Write down:
• The date and time of the call
• The representative’s name
• What was discussed
• Documents requested
• Deadlines provided
• Confirmation or reference numbers
Save copies of every letter, email, application, and document you submit. When possible, ask the servicer to confirm important information in writing.
Be Alert for Foreclosure-Relief Scams
Be cautious of anyone who guarantees that they can stop foreclosure, asks you to transfer ownership of your home, tells you to stop communicating with your mortgage company, or demands a large upfront payment.
A legitimate professional should clearly explain their role and should never pressure you into making an immediate decision without understanding the consequences.
HUD-approved foreclosure-prevention counseling is available at no cost. You can locate a HUD-approved counselor at:
https://www.hud.gov/housing-counseling
You may also call the HOPE Hotline at 888-995-HOPE (4673).
Compare Every Option Before Deciding
The right solution depends on whether you want to remain in the home, whether the hardship is temporary or long-term, the amount of available equity, and what your mortgage servicer will approve.
Before signing an agreement or listing the property, make sure you understand:
• The new monthly payment
• How missed payments will be handled
• Whether additional interest or fees apply
• How the decision could affect your equity
• Important response or foreclosure deadlines
• Whether professional legal or tax advice is needed
You May Have More Options Than You Think
Missing a mortgage payment is serious, but taking action early can make a meaningful difference. Start by contacting your mortgage servicer, gathering your financial information, and determining how much equity may be available in the property.
KW Home Solutions helps homeowners understand their property value, available equity, and possible real estate solutions. Our nationwide network provides confidential, respectful assistance without pressure.
Request a Free, Confidential Home Equity Review
Call or text: 888-870-0443
Visit: KWHomeSolutions.com
KW Home Solutions is powered by KW Default Solutions and Keller Williams Realty.
This information is provided for general educational purposes and is not legal, tax, credit, or financial advice. Mortgage-assistance programs and foreclosure procedures vary by loan, mortgage servicer, investor, and state. Homeowners facing legal deadlines should consult an appropriate attorney or HUD-approved housing counselor.