One of the biggest misconceptions about mortgages is that if you have difficulty making your payment, the last place to turn for help is your lender. In reality, they usually offer the best opportunities for assistance, especially for homeowners who don't wait until the last minute.

During the past few months, nationwide concern over the growing epidemic of failed loans has overwhelmed credit counselors, prompted Congressional investigations, and caused the demise of some of the country's major lenders. Each month, a whopping 100,000 American homes go into foreclosure.

Lenders have historically shown leniency to borrowers facing tragic circumstances, such as the death of a spouse, serious illness, or sudden job loss. But many homeowners don't realize that mortgage companies and banks are also willing and eager to help any homeowner who's faced with challenges that may eventually lead to default or foreclosure. Because lenders are in a position to adjust mortgage rates, negotiate terms, and forgive delinquency, it's in the consumer's best interest to talk to the lender as soon as the first symptoms of difficulty appear.

Lenders to the rescue

Here are some of the solutions that you might find available to you by working with your lender:

• Refinance to a more comfortable fixed-rate mortgage.

  Conventional mortgage rates are still historically low. You may be able to do a simple refinance out of a costly adjustable-rate mortgage. Ask your lender to roll your closing costs into the new loan to save out-of-pocket expenses if you're short on cash.

• Negotiate a temporary "buy down."

  You agree to let the lender lock you into a fixed-rate loan at a somewhat higher mortgage rate. In exchange, the lender starts the mortgage at a low introductory rate that gradually rises over two to three years. This gives you two to three years to recover from a temporary financial setback and get back on your feet.

• Shift into an interest-only loan for a short period of time.

  Interest-only loans allow you to pay no principal, which results in significantly lower monthly payments. Generally considered high-risk loans not recommended for consumers in financial trouble, they may offer a reasonable short-term solution for those whose budgetary problems are temporary, like homeowners waiting for a new job to begin with guaranteed higher income.

The highly motivated lender

The reason that lenders are motivated to help is that foreclosures are expensive. When a property goes through foreclosure, it costs the lender an average of 40 percent of the amount of the mortgage. Several mortgage companies and banks have collapsed because of bad loans, and they'll usually do whatever they can to avoid this doomsday scenario.

The easiest way for lenders to avoid trouble is to help you avert a crisis. Communicate promptly and honestly with your mortgage company, and you may turn a potential disaster into a win-win situation.