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Owning a home is a major milestone, but keeping up with mortgage payments can be tough—especially when life throws unexpected challenges your way. About 2.2 million mortgages were either delinquent or in active foreclosure as of the end of 2024.

Job loss is one of the biggest reasons homeowners struggle with mortgage payments, but other factors—like medical debt, divorce, retirement, or overwhelming debt—can also make it difficult to stay on track.

Regardless of the reason, you can pursue several options to avoid financial hardship and foreclosure. Keep reading to find out how you can get back on solid ground.

What Is Mortgage Debt?

Mortgage debt is incurred when you borrow funds from a lender to buy a home. Since most people can’t afford to pay for a property upfront, they typically make a down payment and finance the rest. The borrowed amount is repaid through monthly installments over an extended period, usually 15 to 30 years, with interest.

As of the fourth quarter of 2024, the average mortgage balance in the U.S. was $148,222 per borrower with a mortgage on their credit report. Mortgage balances can vary based on factors like home prices, loan terms, and interest rates, all of which have fluctuated significantly in recent years.

Mortgages are secured debts, meaning your home serves as collateral. If you fail to make payments, the lender can seize the property through foreclosure to recover the outstanding debt.

Keeping up with mortgage payments is crucial to avoid foreclosure. If you're struggling, exploring mortgage debt relief options may provide a solution.

How Homeowners Lose Control of Monthly Payments

While you may have had good intentions when you took on mortgage debt, things can change. Here are a few reasons why you may have lost control of your monthly payments:

  • Rising mortgage interest rates: Recent rate hikes over a short period have made payments more challenging for many homeowners. This situation becomes even more dire for those with a variable-rate mortgage, as mortgage costs can skyrocket when adjusted.
  • Higher inflation: With the U.S. inflation rate at 3% as of January 2025, many Americans struggle to afford mortgage payments, as wages fail to keep pace with the rising cost of living.
  • Excessive debt: Too much debt also makes repayments more challenging. Some struggling homeowners rely on credit card debt and personal loans to keep up with expenses.

The key to ensuring that your mortgage debt doesn’t get out of hand is to recognize early signs of financial distress, such as:

  • Missing payments on utilities and bills.
  • Struggling to cover basic necessities.
  • Relying on overdrafts, loans, or credit cards to get by every month.
  • Feeling constant financial stress.

How Mortgage Debt Can Affect You

Falling behind on mortgage payments puts you at risk of foreclosure. Mortgage debt can affect you in many ways, and the possibility of losing your home is the biggest worry for any homeowner.

Having high mortgage debt can increase your risk of financial hardship, forcing you to make tough financial choices. You might have to forgo other bills just to keep up with mortgage payments, leading to mounting late fees and financial stress.

If you're relying on credit cards to cover your mortgage or taking out loans to stay afloat, it can create a cycle of debt that's hard to escape. High consumer credit balances can quickly spiral out of control, making it even more challenging to regain financial stability.

Overwhelming mortgage debt can also impact your personal relationships. 54% of people believe that debt is a valid reason to consider divorce. Worrying over high household debt can mean you’ll have less time to focus on your relationships.

Mortgage debt also impacts your credit score. High outstanding mortgage balances mean you’ll have a higher debt-to-income ratio (DTI). A higher DTI impacts your ability to qualify for a loan, and missing mortgage payments can also negatively impact your credit report.

6 Ways To Get Help With Mortgage Debt

If you are facing job loss or financial hardship, there are many debt relief programs to help you manage your debt. Here are six ways to consider:

1. Refinance Your Mortgage

Consider refinancing if your monthly mortgage payments are high because of the rising mortgage rates. Many borrowers opt for adjustable-rate mortgages because of the lower monthly payments, but once the fixed rate term is over and the loan converts to an adjustable rate, you may struggle.

Talk to your mortgage provider to see if there is a cap on how much your payments can rise during a fixed period. Explore options to refinance your mortgage to a fixed rate. Shop around and compare interest rates, repayment terms, and penalties before refinancing your mortgage.

2. Ask About Forbearance

If your financial situation is temporary, a debt forbearance agreement may help. Many mortgage lenders offer support for borrowers facing temporary setbacks.

With forbearance, you can temporarily defer your monthly debt payments. Once the forbearance period ends, you can resume making payments. Some lenders may allow extra payments to stay on track, but terms vary.

It’s important to remember that forbearance is available for the short term. You’ll need a plan in place on how you’ll keep up with your mortgage payments at the end of the forbearance term.

3. See If You Qualify for Loan Modification

A loan modification is another debt relief option to discuss with your lender. In some cases, your lender may be able to modify the repayment terms to make your loan payments more affordable.

Many mortgages are backed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. If you have a mortgage from a qualified lender, it may be guaranteed by these government enterprises. This means your lender may be able to help you avoid foreclosure through programs such as the Flex Modification Program.

If eligible, your mortgage payments can be lowered by 20%. Under this program, your lender will first capitalize outstanding payments, lower your interest rate, and extend the repayment term for the principal balance once your loan is modified.

4. Sell Your Home

One of the fastest and best ways to get out of your mortgage debt is by selling your property and using the funds to pay off your total mortgage. For many homeowners, this is a viable approach if their current home value is more than what they owe.

If you’ve recently bought your home with little equity, selling may not be the best option. Moreover, if your financial problems are because of having a house that is too big, you can also downsize to reduce the amount of debt you owe.

5. Consider Deed in Lieu of Foreclosure

You can voluntarily turn over the ownership to your mortgage lender and avoid foreclosure. If your lender agrees, you can hand over your deed in exchange for getting released from the mortgage.

In most cases, a lender will agree to this arrangement only if they are convinced that you will not be able to make payments. This option is fast and saves your lender the hassle of going through a traditional foreclosure.

The catch here is that if your home sells for less than what you owe, you may still be responsible for the deficiency balance.

6. See If Your Lender Will Agree to a Short Sale

If the current value of your home is less than the outstanding loan balance, a short sale can be helpful. With this option, your lender will agree to accept the price at which your house sells as the full payment on the outstanding mortgage. The remaining debt will be erased if your home sells for less than what you owe.

In some cases, a short sale can be better than foreclosure. Once you opt for a short sale, consult a tax professional to determine what you owe in case of deficits or capital gains.

Talk to Your Lender About Mortgage Debt as Soon As Possible

If keeping up with your mortgage payments is challenging, reach out to your mortgage lender. Although your mortgage is considered a secured debt that doesn't qualify for debt relief, help is available in many forms.

TurboDebt offers debt relief through strategic planning, advising, and consulting services. Our knowledgeable counselors can help you find the right debt relief options and resolve the financial challenges you’re currently facing. Connect with us for a free consultation today.

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