Real Estate

What to Do If You Can’t Afford Your Mortgage Payments

What to Do If You Can’t Afford Your Mortgage Payments

Suddenly being unable to pay your mortgage is every homeowner’s nightmare. Falling behind on your mortgage payments differs from failing to pay your rent since it can greatly affect your credit score. In addition, it can cost you penalties and fees or even put your house in jeopardy if you can’t pay off the mortgage.


Fortunately, you have several options that can allow you some time to work things out if you can’t salvage the situation. Here are some ways to reduce your mortgage and avoid foreclosure while preserving your credit rating.

Contact your lender first

If you are experiencing financial challenges and having trouble paying your mortgage, your first step should be to call your lender. Contact your mortgage lender immediately and inform them of your situation. Furthermore, ask whether there are any payment options available, including lowered monthly interest rates or halted interest payments.

Your lender can also discuss some options with you and give suggestions, including applying for Family benefits in Saskatchewan if you have experienced a job loss or other financial hardship. Your lender will determine whether you are eligible for relief and how you will pay off missed payments.  

Refinance your mortgage

Getting a new mortgage with a reduced monthly payment could make your house payments more affordable, especially if your credit is good. Generally, refinancing will be your best option if you have at least 20% equity in the home, and you can get a new mortgage at a considerably lower interest rate than you have on your current loan.

Refinancing can take weeks or even months, and you will likely have to pay origination fees connected with the new loan. If you have already failed to make payments on the current loan, it could affect your chances of approval on a new mortgage.

Get mortgage modification

Modifying your mortgage can also be a great option. This is where the lender agrees to change your loan terms to make it more affordable. It may include extending your loan term by several months, reducing the interest rate, and, in some cases, even lowering your mortgage balance.

If you are experiencing financial challenges, you can consider a mortgage modification to adjust your loan terms. Lenders have no obligation to grant mortgage modification and usually do so for clients with a good credit score who can show they can keep up with payments under new loan terms.  

Forbearance can help

Forbearance can be a better option if you only require temporary help. For instance, you can consider this option if you have fallen behind on your mortgage payments since you recently lost a job but expect to regain employment soon.

Under forbearance, you and your lender will arrange an agreement whereby you halt paying your mortgage for a certain amount of time. Once the agreed-up time ends, you will be required to make a series of down payments for the months you missed until you fixed up your account.


There are several ways to avoid foreclosure if you can’t afford your mortgage payments due to your financial situation. However, the best strategy is to pay off your mortgage early and avoid missing mortgage payments before all else. To achieve this, ensure you have a considerable emergency fund that can cover your expenses if you lose a job or are struggling financially.


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