A mortgage is a long-term commitment, often lasting decades. Over that time, changes in employment, income, health, or the broader economy can affect a homeowner’s ability to keep up with payments. If you’re experiencing difficulty, it’s important to know that many homeowners face similar challenges, and support options may exist.
For those struggling to make payments, mortgage relief may be available in different forms. Some homeowners qualify for multiple options, while others may only qualify for one. Availability and terms depend on factors such as loan type, lender guidelines, and individual circumstances.
Everyone’s situation is different. Some homeowners may be short a small amount each month, while others may have experienced a significant income reduction or fallen behind on payments. Banks, lenders, and government programs generally recognize that temporary or long-term hardships can occur, which is why various assistance programs exist.
Below are several mortgage relief options that may be worth exploring.
Mortgage Refinancing for Lower Monthly Payments
If you’re able to keep up with payments but find them increasingly difficult to manage, refinancing your mortgage may be an option to consider.
A refinance replaces your existing mortgage with a new loan. Homeowners often refinance to seek a lower interest rate, adjust loan terms, access equity for other expenses, or reduce monthly payments. In some cases, extending the loan term—even at a slightly higher rate—can lower the required monthly payment.
For example, if you owe $100,000 with 12 years remaining, refinancing into a 15- or 20-year loan could reduce monthly payments. However, this may result in paying more interest over the life of the loan and extending the payoff timeline.
Mortgage Loan Debt Protection Coverage
Some mortgages include debt protection features, depending on when the loan was originated and the lender involved. This type of coverage can function similarly to insurance and may provide assistance following certain life events.
Terms vary by lender, but in some cases, debt protection may apply after events such as job loss, disability, or the death of a borrower or co-signer. Coverage is not universal, so it’s important to review your loan documents or contact your lender to see if this applies to your mortgage.
Mortgage Forbearance / Temporary Mortgage Relief
Many lenders prefer to work with borrowers during times of hardship rather than proceed toward foreclosure. Mortgage forbearance is one option that allows eligible homeowners to temporarily reduce or pause payments.
Forbearance may be available to homeowners who experience job loss, illness, emergencies, or other qualifying hardships. Terms vary, and approval is not guaranteed.
Does Mortgage Forbearance Affect Your Credit?
In some cases, yes. Unless your lender agrees not to report it, a forbearance may appear on your credit report. While it’s generally less harmful than missed payments or foreclosure, it can still have some impact.
How Does Mortgage Forbearance Work?
If approved, your lender will outline specific terms, which may include:
- The length of the forbearance period
- Whether payments are reduced, paused, or deferred
- How missed or reduced payments will be repaid afterward
- How the account will be reported to credit bureaus
When Forbearance Ends, Do You Still Owe Money?
Typically, yes. Any unpaid portion of your mortgage payments usually remains due. Repayment may be required as a lump sum, through higher future payments, or by extending the loan term, depending on the agreement.
How Do You Qualify for Mortgage Forbearance?
Eligibility and requirements vary by lender. You may be asked to provide:
- Information about your current income and any co-borrowers
- A summary of assets
- Monthly expense details
- Documentation explaining your financial hardship
Contacting your lender early—before missing payments—can improve the chances of finding a workable solution.
Mortgage Loan Modification
A mortgage loan modification permanently or semi-permanently changes the terms of your existing loan. Unlike refinancing, the original loan remains in place, but terms such as interest rate, loan length, or payment structure may be adjusted.
Lenders may offer modifications if they believe it improves the likelihood of repayment compared to foreclosure.
How Do You Qualify for a Loan Modification?
Loan modifications typically require proof of financial hardship. Some lenders may require that you already be delinquent or at risk of becoming delinquent. Approval depends on lender policies and individual circumstances.
Does a Mortgage Loan Modification Affect Your Credit?
A modification may negatively affect your credit, though typically less severely than foreclosure. Future lenders may require a period of on-time payments under the modified terms before approving new credit.
Mortgage Relief Options Can Help
Mortgage payment challenges are common, which is why many lenders have programs designed to assist borrowers during difficult periods. While these options don’t eliminate all consequences, they may help prevent more serious outcomes like foreclosure or bankruptcy.
If you’re struggling, reaching out to your lender early to discuss available options can help you better understand what support may