Struggling With Your Mortgage? Here’s What To Do Next

Falling behind on your mortgage can be scary — but you’re not alone, and there are options to help you protect your home. Whether you’ve just missed a payment or you’re several months behind, the most important thing is to take action as early as possible.

This guide explains what happens when you're late on a mortgage payment, what your lender can and can’t do, and the tools that may help you stay in your home or avoid foreclosure.

What Happens When You Miss a Mortgage Payment?

Missing a mortgage payment can feel overwhelming, but it’s important to know what to expect and what steps to take next. Most lenders don’t immediately take action the day your payment is late — but the longer you wait, the more serious the consequences become.

At first, you may just owe a late fee. But over time, missed payments can hurt your credit score, lead to collection activity, and eventually put your home at risk of foreclosure.

The good news? You usually have a window of time — often more than 30 days — to take action, catch up, and explore your options before things escalate.

You’ll find a more detailed timeline of what happens at each stage below, but first, let’s cover an important exception that could buy you a little breathing room: the grace period.

What Is a Mortgage Grace Period?

A grace period is a short window after your mortgage due date (usually about 15 days) where you can still make your payment without facing a late fee or credit hit. 

Most mortgage payments are due on the first of the month, but many lenders allow you until the 15th to pay without penalty.

If you make your payment during the grace period:

• ✅ You won’t be charged a late fee.

• ✅ Your credit won’t be affected.

• ✅ The payment won’t be marked as late.

💡 Check your loan documents or call your mortgage servicer to confirm the length of your grace period. It can vary depending on your loan type and lender.

⚠️ Important: Your payment must be received by your lender — not just mailed — before the grace period ends. If you’re getting close to the deadline, consider paying online or by phone to make sure it’s processed in time.

Consequences of Late or Missed Mortgage Payments

Being late or missing one mortgage payment may not have serious consequences, but if the pattern continues, the consequences will get more serious.

Here are some of the most common effects:

• 📉 Credit score damage

  • Mortgage payments over 30 days late can be reported to the credit bureaus. Just one late payment can lower your credit score by 50 to 100 points. Multiple missed payments can have an even bigger impact and stay on your credit report for up to seven years.

• 💸 Late fees

  • Most lenders charge a late fee once your grace period ends. This fee is often 2%–6% of your monthly mortgage payment. These fees can quickly add up, making it even harder to catch up the following month.

• ⏩ Loan acceleration

  • If you fall far enough behind, your lender might trigger a clause in your mortgage called an acceleration clause. This allows them to demand the full loan balance all at once, plus interest and late fees. If you can’t pay the amount in full, foreclosure may follow.

• 📬 Collection activity and legal notices

  • You may receive calls, letters, or official notices once you hit certain late-payment milestones. Around 45 days late, most lenders are required to contact you about your loss mitigation options. At 90 days, they may notify you that foreclosure is on the horizon.

These consequences don’t always happen immediately, but once they start, they can escalate quickly. That’s why it’s so important to act early, even if you’ve only missed one payment.

Timeline for Missed Mortgage Payment Consequences

🗓️ Once you go beyond the grace period, though, the consequences start to add up:

• Day 16+: Late fees start, usually 2%–6% of your monthly payment.

• Day 30+: Your lender may report the late payment to the credit bureaus, lowering your credit score.

• Day 45: You’ll receive information about loss mitigation options like loan modification or forbearance.

• Day 90: Your lender may send a notice that your loan is in default and warn that foreclosure is coming. This is also around the time they may invoke an acceleration clause, which means they can demand that you pay back the entire loan balance at once.

• Day 120: Foreclosure proceedings may begin.

What Is a Mortgage Acceleration Clause?

Most mortgage contracts include something called an acceleration clause, but many homeowners don’t realize it until they’re behind on payments.

An acceleration clause gives your lender the right to demand the entire balance of your loan if you break the terms of your mortgage. That usually means missing multiple mortgage payments, but the number can vary depending on your loan and lender.

Once your lender activates the clause, they’ll send a formal acceleration notice. This letter typically includes:

• The total amount you owe

• The reason the loan has been accelerated

• Instructions for paying the full amount (usually within 30 days)

• Contact information to discuss your options

If you don’t pay the full amount listed in the letter, your lender may begin the foreclosure process.

Receiving an acceleration notice is serious, but it doesn’t always mean foreclosure is guaranteed. Many lenders would rather avoid foreclosure and are open to working with you if you act quickly. The next section covers potential options.

What If You Can’t Afford Your Mortgage Payment?

​​If you're falling behind on your mortgage, or think you might soon, don’t wait to act. There are several options that may help you stay in your home and avoid foreclosure. The right choice depends on your financial situation, the type of loan you have, and how far behind you are. 

🔍 Here are some common options many homeowners explore:

• Loan modification

• Mortgage forbearance

• Refinancing the loan

• Repayment plan

• Lump-sum reinstatement

How To Lower Your Mortgage Payment With Loan Modification

A loan modification changes the terms of your existing mortgage to make the monthly payment more affordable. 

This could include one or more of the following:

• Lowering your interest rate

• Extending the length of your loan

• Rolling missed payments into the loan balance

Most people pursue a loan modification when they’ve had a long-term financial setback, like a job loss or medical issue. If your loan is backed by the government (like FHA, VA, USDA, Fannie Mae, or Freddie Mac), you may qualify for specific modification programs. These often aim to reduce your monthly payment by up to 20%.

How To Get Mortgage Loan Modification

If you want to explore loan modification, begin by contacting your mortgage servicer and asking to apply for a loan modification. You can usually request a Mortgage Assistance Application (some servicers call this a hardship package).

Then, fill out the application. It often helps to gather documents like pay stubs, tax returns, and bank statements. Many people also write a letter explaining their hardship.

Finally, submit everything by the deadline, and follow up to make sure your application is complete.

💡 Tip: Consider talking to a HUD-approved housing counselor for free help with this process.

How To Temporarily Pause or Reduce Your House Payment With Mortgage Forbearance

Forbearance is a temporary pause or reduction in your mortgage payments. It gives you time to recover from a short-term hardship without falling further behind. Forbearances typically last for 3–6 months.

For example, if you’re dealing with a medical emergency or lost income but expect to get back on your feet in a few months, forbearance could be a good short-term solution. Just keep in mind that once the forbearance period ends, you’ll still need to repay the missed amount. You can typically choose to do this all at once or in installments through a longer-term plan.

How To Get Mortgage Forbearance

If you're interested in forbearance, start by contacting your mortgage servicer and asking about their forbearance options. Be ready to explain your current financial hardship and whether it's temporary.

Your servicer may ask you to complete a hardship application. Some programs are as simple as a phone call, while others require paperwork.

During this conversation, ask how the missed payments will be handled after the forbearance ends. Some plans require lump-sum repayment, while others offer repayment plans or payment deferral.

💡 Tip: Confirm whether your loan is federally backed (like FHA, VA, USDA, Fannie Mae, or Freddie Mac). These loans come with specific forbearance protections under federal law. You can find more info on this from the Consumer Financial Protection Bureau.

Refinancing Your Home To Lower Your Mortgage Payment

Refinancing means taking out a new mortgage to replace your current one. The goal is usually to:

• Get a lower interest rate

• Reduce your monthly payment

• Switch from an adjustable to a fixed rate loan

• Extend your loan term to lower the payment

To refinance, you’ll typically need a solid credit score and steady income. 

💰 You’ll also have to pay closing costs, which can be thousands of dollars. Still, refinancing can be a smart move if it lowers your payment enough to make it manageable again.

How To Refinance Your Mortgage

To start the refinancing process, check your credit score and review your current loan terms. 

Next, reach out to a few licensed mortgage lenders and ask for quotes. Compare interest rates, closing costs, and loan terms.

Once you choose a lender, you'll need to complete a loan application and submit financial documents like pay stubs, tax returns, and your current mortgage statement.

💡 Tip: Refinancing works best if your credit is in decent shape and interest rates are lower than when you got your original loan. You can use a refinance calculator to see how much you’ll save each month — and over the life of the loan. Make sure the savings are worth the closing costs.

How To Catch Up on Past-Due Mortgage With a Repayment Plan

A repayment plan lets you catch up on missed payments by spreading them out over time. You’ll make your regular monthly payment plus a portion of the amount you owe. Once you’ve caught up, your loan will be considered current again.

Many people use a repayment plan if they’ve fallen behind but can now afford their regular payments plus a little extra. This option is often offered after a short-term hardship has ended.

💡Repayment plans are sometimes confused with loan modifications, but they’re different. A repayment plan helps you catch up without changing your loan terms, while a loan modification permanently changes your mortgage to make it more affordable moving forward.

How To Set Up a Repayment Plan

If you’re back on your feet financially but still behind on payments, contact your mortgage servicer and ask about setting up a repayment plan.

The servicer will likely ask about your income and how much extra you can afford to pay each month. If approved, you’ll make your regular mortgage payment plus a set amount toward your overdue balance for a few months.

Once you're caught up, your mortgage will be considered current again.

How a Lump-Sum Reinstatement Can Help if You’re Behind on Your Mortgage

If you're able to pay back everything you owe all at once, your lender may allow you to reinstate your loan and bring it current. This is called a lump-sum reinstatement. Some homeowners use savings, a work bonus, or even financial help from family or friends to make this happen.

It’s not realistic for everyone — especially if you’ve missed several payments — but if you can make a lump-sum payment, it may be the fastest way to avoid further penalties and get back on track.

How To Request Lump-Sum Reinstatement

If you have the funds to pay everything you owe, ask your mortgage servicer for a reinstatement quote. This will include your past-due payments, late fees, and any other charges.

Ask for clear instructions on how to make the payment. Some servicers may require a certified check or wire transfer. Once you pay the amount in full, your loan will be brought current.

💡 Tip: Ask your servicer to send a written confirmation that your loan is reinstated and that no further action is pending.

Other Options if You Can’t Catch Up on Your Mortgage

Not everyone qualifies for a loan modification, forbearance, or refinance. And for some people, catching up just isn’t realistic, especially if the financial hardship is long term or the home is worth less than what’s owed.

If none of the earlier options work for you and you’re at risk of foreclosure, it might be time to explore:

• A short sale

• Deed in lieu of foreclosure

• Bankruptcy

These solutions may help you avoid losing your home, limit the long-term impact on your credit, or give you a path toward financial stability.

Short Sale

A short sale means selling your home for less than the amount you owe on your mortgage. Your lender has to approve the sale because they’ll be accepting less than the full loan balance.

Many people pursue a short sale when:

• They owe more on their home than it’s worth.

• They can’t afford the mortgage anymore.

• They want to avoid the credit hit and stress of a foreclosure.

Short sales may be less damaging to your credit than a foreclosure, but they can still show up on your credit report and may come with tax consequences. 

Some lenders also reserve the right to pursue a deficiency balance, so it’s important to ask what the lender will agree to in writing. A deficiency balance is the difference between what you owed and what the home sold for.

Deed in Lieu of Foreclosure

In a deed in lieu of foreclosure, you voluntarily give the home back to the lender instead of going through the foreclosure process.

This can be a faster and less stressful way to resolve the situation, especially if your home won’t sell or you’ve already tried a short sale that didn’t go through.

Keep in mind:

• The lender must agree to accept the deed in lieu.

• You’ll need to leave the home.

• Like a short sale, it may still affect your credit and have tax consequences.

Some lenders will agree not to pursue you for any remaining balance, but it’s important to get that agreement in writing.

Bankruptcy

If you’re facing foreclosure and can’t catch up on your own, bankruptcy may be able to help you stay in your home, or at least prevent further financial fallout.

Chapter 13 bankruptcy includes a repayment plan that allows you to catch up on missed mortgage payments over 3–5 years. Many people use it specifically to stop foreclosure and keep their home.

Chapter 7 bankruptcy may not stop foreclosure permanently, but it can delay the process and wipe out your remaining mortgage debt if you surrender the home.

Both types of bankruptcy can stop collection calls and give you breathing room. But they come with some consequences, so it’s good to explore the pros and cons. If you want some legal insight, you can set up a free consultation with a bankruptcy attorney to discuss your situation and learn more about your options.

Can I Just Walk Away From My Mortgage?

Some people in tough financial situations think about walking away from their home. This is sometimes called a strategic default, when you stop paying the mortgage even though you could technically keep making payments.

While it might sound like a clean break, walking away has serious consequences:

• Your lender will eventually foreclose on the home.

• Your credit score could drop significantly.

• You could be sued for the unpaid loan balance in states that allow deficiency judgments.

• You might still owe property taxes or homeowners association fees.

People typically consider this when the home is deeply underwater (worth much less than the mortgage), and no other options seem realistic. But this move comes with risk, and it’s important to understand the legal consequences in your state.

Behind on Your Mortgage? Here’s What To Do Next

If you’re behind on your mortgage or worried you might be soon, the most important step is to take action. The sooner, the better. The earlier you reach out for help, the more options you’re likely to have.

Here’s a quick checklist to help you get started:

• Review your mortgage statement to see how much you owe and how far behind you are.

• Contact your mortgage servicer to ask about hardship options like forbearance, repayment plans, or modification.

• Gather your financial documents, such as recent pay stubs, tax returns, and bank statements.

• Speak with a HUD-approved housing counselor for free advice and help navigating your options.

• If foreclosure is on the table, consider setting up a free consultation with a bankruptcy attorney to understand your rights and alternatives.

💡 No matter how far behind you are, there may still be a way forward. The key is to start the conversation!