7 options if you can't make your mortgage payment

If you can't make your next mortgage payment, you're not alone: More than 3% of mortgages are in some stage of delinquency, according to analytics firm Cotality, from borrowers just 30 days overdue to those facing foreclosure.

If you've fallen behind, though, don't ignore the problem: The sooner you act, the quicker you can minimize penalties, limit damage to your credit score and avoid having your home repossessed.

Depending on whether the issue is temporary or long-term, your mortgage servicer may suggest some solutions. You can also connect with a HUD housing counselor for no-cost advice.

There are private, state and federal programs that help homeowners with their mortgage payments, including ones from the Department of Housing and Urban Development and the Department of Veteran Affairs.

Keep an eye out for mortgage relief scammers, though, who may promise to change the terms of your loan or guarantee that you'll keep your home. Asking for payment upfront, demanding a retainer fee or requesting the deed to your house are all major red flags.

Your servicer may agree to pause or reduce payments while you get your finances in order. A mortgage forbearance agreement lays out the terms, including how much time you'll have to bring payments current, in exchange for your lender agreeing to hold off foreclosure proceedings.

Forbearance periods can last up to 18 months, which can help with a short-term setback like a job loss or medical emergency.

It's not a permanent solution, however, and your credit score may still take a hit.  

If you can refinance your mortgage to a lower interest rate, it could shrink your monthly housing payments.

Online lender Rocket Mortgage doesn't charge closing costs on refinance mortgages, while PNC Bank lets borrowers refinance second homes and investment properties. Both lenders are among our top picks for mortgage refinancing.

If your loan is backed by a government agency, you may be eligible for refinancing through Freddie Mac's Refi Possible or Fannie Mae's Refi Now programs. VA loans are eligible for an Interest Rate Reduction Refinance Loan (IRRRL), which streamlines the refinancing process often with simplified underwriting and no new appraisal required.

While forbearance offers a temporary respite, loan modification can change the terms of your loan, the interest rate you pay, or both. 

Borrowers typically request loan modification after a forbearance period, so you'll have to prove you're not at risk of defaulting again. You may need to provide pay stubs, bank statements, tax returns and other financial documents, as well as a hardship letter explaining your circumstances.

Borrowers may also request a modification if they've repeatedly been denied refinancing. If your loan is at least 115% of the value of your home, you may qualify for the Principal Reduction Alternative program, which can lower your monthly payment and interest rate.

Like forbearance, loan modifications are reported to credit agencies and can affect your credit score. 

If your forbearance period is ending, your mortgage servicer might allow you to break up the missed payments into smaller amounts to be repaid over months, rather than all at once. 

Unlike a loan modification, though, the terms and interest rate wouldn't change.

This type of mortgage relief is only available after you've missed one or more payments. Fannie Mae's mortgage repayment calculator shows you what your repayment plan could look like. 

If other options aren't available, you may need to sell your home and either downsize or rent to keep your financial problems from compounding.

In a short sale, you would sell your house for less than the balance of your mortgage. If your lender agrees, they'd then forgive the remainder of the loan.  

A short sale can significantly impact your credit score, but it might be the best choice if you can't wait for a good offer or if your mortgage is underwater. 

Although you'd have to give up your house, a deed-in-lieu agreement enables you to avoid foreclosure, which can knock your credit score down by more than 100 points and make it difficult to buy another house.

In exchange for surrendering the property, you are not required to pay the remainder of your mortgage. You'll lose any equity on the property, however, and may have to pay taxes on the forgiven loan balance.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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