I am consistently one payment behind on my mortgage, and I can’t catch up. What can I do? Could I negotiate with the lender to tack the payment on at the end of my loan term, or something like that?
The quickest way to get caught up is to double up on your payment one month, including any late fees. If you cannot do this, you may be able to convince the lender to add the payment to the end of your loan term. Another option, one that the lender would be more likely to agree to, is to get caught up using a repayment plan.
How Does a Repayment Plan Work?
With a repayment plan, you work out an agreement with the lender to spread the past due amount over a specific period of time, usually several months, in order to bring your mortgage current. During the repayment period, a portion of the past due amount is added to each of your normal monthly mortgage payments. Once the repayment period has ended, you’ll be current on your mortgage payments (as long as you made every payment).
Steps to Obtaining a Repayment Plan
If you want to use the repayment plan option, here's what to do.
Step 1 - Gather Up Your Financial information
Before you call your lender or loan servicer (the company that you make your payments to), gather up all of the following documents and have them available when you make the call:
- your monthly mortgage statements, including information on any second mortgage
- information about your other monthly debt payments (for example, car loans, student loans, and credit card payments), and
- information about your monthly income (including two recent paystubs and your income tax return).
Step 2 – Contact the Lender/Servicer
Call your lender or servicer and tell them you are interested in a repayment plan and would like to find out if you are eligible. Be prepared to explain why you are having trouble bringing your loan current, including the reasons why you fell behind and why you can’t catch up. Your lender or servicer will walk you through the next steps to find out if you qualify and help you get back on track with your loan payments.
Step 3 – Sign the Repayment Agreement
Once you and your lender figure out a repayment plan, you will sign an agreement that outlines how you are going to repay the past-due amount, including the length of the repayment period and the specific terms. After you make all of the payments, you’ll be current on your loan.
You Can Obtain Free Help
If you are having trouble getting your loan payment current, you should contact your lender or loan servicer as soon as possible to go over your situation, discuss what you hope to do, and find out the answer to any questions you may have.
However, if you find that you are having difficulty dealing with your lender or loan servicer (before or after contacting them to ask for a repayment plan), you can get free assistance from a HUD-approved housing counselor who will work with you and your mortgage servicer on your behalf.
Call 888-995-HOPE (4673) to speak with a counselor about your individual situation.
To learn more about repayment plans and other options to avoid foreclosure, visit Nolo’s Alternatives to Foreclosure area.