Why You Should Talk to Your Lender Early if You’re Struggling
Prompt Communication Could Save Your Home, So Talk to Your Lender Early.
Falling behind on your mortgage is one of the most stressful financial experiences a homeowner can face. The instinct for many people is to avoid the issue, hoping it will resolve itself or fearing what their lender might say. But when it comes to mortgage trouble, early communication with your lender is one of the most important steps you can take.
Whether you’re dealing with job loss, medical bills, or rising costs of living, talking to your lender before you miss a payment—or as soon as you do—is often the key to avoiding foreclosure.
Why Homeowners Avoid Contacting Their Lenders
Before we get into solutions, it’s important to understand the mindset of a struggling homeowner. Many people delay contacting their mortgage company out of:
- Fear of being judged or scolded
- Embarrassment about financial hardship
- Hoping the situation will improve quickly
- Confusion about what to say or ask for
- Anxiety about “starting the foreclosure process”
But this silence only works against you. The longer you wait, the fewer options you’ll have—and the more power your lender gains to proceed with foreclosure.
What Happens If You Ignore the Problem
Missing one payment may not trigger immediate legal action, but mortgage companies typically begin sending notices quickly. If you ignore these communications:
- Late fees and penalties will add up
- Your credit score will take a hit
- The risk of foreclosure increases
- You may lose eligibility for easier repayment options
By contrast, homeowners who contact their lender early often gain access to foreclosure prevention options before things spiral out of control.
What Lenders Can Actually Do to Help
Many people don’t realize that most lenders don’t want to foreclose. Foreclosure is expensive and time-consuming for banks. If there’s a way to keep you in your home and collecting payments, they’ll usually prefer that route.
If you’re upfront about your financial struggles, your lender may offer:
1. Loan Forbearance
A temporary pause or reduction in your mortgage payments during a financial hardship.
2. Loan Modification
A permanent change to the terms of your loan—such as a lower interest rate or extended term—to make payments more affordable.
3. Repayment Plan
Allows you to catch up on missed payments by adding a portion to future payments over time.
4. Deferment of Missed Payments
Some lenders will allow missed payments to be tacked onto the end of your loan.
5. Short Sale or Deed in Lieu of Foreclosure
If staying in the home isn’t possible, they may help you exit with less financial damage.
How to Contact Your Lender and What to Say
Here’s a simple guide to start the conversation the right way:
Step 1: Gather Documentation
Have recent pay stubs, tax returns, a budget, and a hardship letter ready. Be prepared to explain:
- Why you’re struggling
- Whether it’s temporary or long-term
- What steps you’re taking to resolve it
Step 2: Call the Mortgage Servicer
Look for the customer service number on your mortgage statement. Ask for the Loss Mitigation Department.
Step 3: Be Honest and Direct
Explain your situation clearly. Example:
“I’ve just lost my job and won’t be able to make my next payment. I want to avoid foreclosure. Can you tell me what options might be available?”
Make Sure to Document everything—who you spoke to, the location, the date, and what was said.
The Sooner You Act, the More Options You Have
Timing matters. Here’s how your options can shrink if you delay:
| Stage | Available Options |
|---|---|
| Before missed payment | Forbearance, deferment, assistance plans |
| 30–60 days late | Loan modification, repayment plans |
| 90+ days late | Foreclosure proceedings may begin |
| After Notice of Default | Options limited, legal deadlines apply |
| After foreclosure sale | Redemption rights (only in some states) |
Every day counts. Acting early means more time, less stress, and better outcomes.
Work with a Housing Counselor
If you’re unsure how to approach your lender or feel overwhelmed, consider speaking with a HUD-approved housing counselor. These professionals offer free or low-cost guidance and can:
- Review your loan and budget
- Help you understand your rights
- Assist in filling out modification or forbearance applications
- Represent your interests in negotiations
You can find one near you at www.hud.gov.
You’re Not Alone—Millions Have Been There
If you fall into arrears, it’s easy to feel isolated when facing mortgage hardship, but millions of homeowners have dealt with the same situation. Whether it was due to illness, divorce, job loss, or inflation, many have recovered thanks to early communication, proactive planning, and helpful lender programs.
Lenders are not your enemy—they’re your first lifeline. The sooner you pick up the phone, the sooner you can start moving toward a solution.
Final Thoughts on Why You Should Talk to Your Lender Early
If you’re struggling with mortgage payments—or expect to—don’t wait to talk to your lender. Open, early communication is the best way to avoid foreclosure, protect your credit, and keep your home.
This one step can unlock loan modifications, forbearance, and other options you may not even know exist. Your lender has programs that only work if you reach out early.
For more helpful guidance, explore the rest of our Foreclosure Help & Advice section or visit our Foreclosure Glossary to better understand your options and rights.