Talking to the lender, or loan servicer, the company that collects the payments, should be one of your first steps. The earlier you call, the better your chance to work out a solution. Here are some options:
Loan Modification. Loan servicers can help you catch up on late payments or amend your mortgage to make it more affordable. For homeowners who face losing their home, a loan modification is often the most effective way to avoid foreclosure. The options include:
o Adding all the missed payments to the loan amount and changing the monthly payment to cover the larger loan.
o Giving you more years to pay off the loan, lowering the interest rate, and/or forgiving part of the loan, to lower your monthly payment.
o Switching from an adjustable rate mortgage to a fixed rate mortgage, so you can avoid higher monthly payments.
o Requiring amounts for taxes and insurance to be included with your monthly mortgage payment so you avoid big bills in addition to your mortgage.