What to do when you can't pay your mortgage

What to do when you can’t pay your mortgage? Losing your job, or incurring unexpected expenses like medical bills can make it difficult to keep up on your payments. Even when you find work, it can be hard to catch up on everything at once. If you are paying late fees every month, it's even harder.

Your lender wants you to be current on your payments, but also knows that life can come down hard and that you may be in a position where you are making some difficult decisions.

• Talk to your lender. You want to keep your house and they want you to keep it, too. Your lender doesn't make money on a foreclosure, and they know that the foreclosure process is difficult for you, both emotionally and financially.

• Some lenders will work with you by allowing you to send a payment and a half for several months, without charging additional late fees, until your loan is current.

• If you have fallen behind and it looks doubtful that you will be able to make up the back payments in the near future, some lenders will make an exception to the terms of your loan agreement and add the delinquent payments and interest back into the principal of your loan to give you a fresh start.

• If your situation looks bleak enough that foreclosure is imminent, some lenders will give you some time to sell your house, and even forgive part of the interest you owe.

• If you experience a fire or natural disaster that forces you to live in a hotel while the repairs are done, it may be necessary for you to initially cover many unexpected expenses that will eventually be covered by your insurance company. If you let your mortgage lender know about the situation right away, they may allow you to postpone your payments without penalties until your insurance company reimburses you.

• If interest rates are lower than what you are currently paying, you may be able to refinance and get lower monthly payments. If you can get a refinance plan that allows you to add the loan fees back into the principal, the out-of-pocket expense may be small, too.