Does the thought of paying your mortgage bill each month keep you awake at night? Do you toss and turn worrying about whether you'll have enough money to send to the electric company this month?

You're far from alone. A July poll by the Washington, D.C.-based National Foundation for Credit Counseling found that nearly four out of five respondents admitted that worries about their personal finances keep them awake at night.

And of all the bills that homeowners have to pay, none are as imposing as their monthly mortgage payment.

Has a financial setback -- a spouse's job loss, a reduction in working hours, an injury suffered on the job -- made your once-affordable mortgage payment a monthly burden?

There is some hope: You can take steps to reduce the size of your monthly mortgage payment. But you'll have to be prepared to prove that your finances really have taken a hit.

"The first thing to do is to call your mortgage company," said Don Frommeyer, president of the National Association of Mortgage Brokers and senior vice president with Amtrust Mortgage Funding in Carmel, Ind. "Your mortgage company might be able to work out a solution so that you don't fall behind on your payments. But you have to be proactive. Don't wait to call."

Worried about the bills

The National Foundation for Credit Counseling in July found that 79 percent of respondents cited financial worries when asked what keeps them awake at night. That response was by far the most common. The second most popular response to this question -- "Nothing, I sleep like a baby" -- was cited by just a fortunate 13 percent of respondents.

The news wasn't all bad from the poll, though, said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling.

"The respondents were able to identify the source of their distress," Cunningham said.

That's important: Identifying the financial problems that keep you awake at night are the first step in resolving them, Cunningham said.

Mortgage woes

But what if your problem is that you can barely afford your mortgage payments? What if you know you won't have enough money this month to send to your mortgage lender?

You do have options, though none of them are simple.

If you have time, and you haven't yet fallen behind on your mortgage payments, you might try the simplest approach: refinancing your mortgage loan to one with a lower interest rate. If your interest rate falls by enough through the refinance, your monthly mortgage payment could drop by $200 or more.

Consider these numbers: If you are currently paying off a $200,000 30-year fixed-rate mortgage loan at an interest rate of 6 percent, your monthly mortgage payment -- not counting property taxes or insurance -- would stand at about $1,199. Say you owe a total of $180,000 on that mortgage loan. If you refinance that $180,000 to a 30-year fixed-rate loan with an interest rate of 4.25 percent, your monthly payment -- again not counting property taxes and insurance -- would fall to about $885 a month.

That's a monthly savings of $314. That might be enough of a drop to ease your financial woes. After all, if your monthly mortgage payment falls, it might free up enough funds to allow you to easily cover the rest of your monthly bills.

Refinancing isn't always a perfect solution, though. First of all, it takes time. A refinance can take 60 days or more to close. If your financial situation is too dire, you might begin falling behind on your mortgage payments before a refinance closes. That could scuttle your refinance.

Also, lenders typically require that you have at least 20 percent equity in your home before they'll approve you for a refinance. If you are underwater on your home -- owing more on your mortgage loan than what your home is worth -- you'll struggle to find a lender willing to refinance your mortgage.

Consider a loan modification

But even if a refinance won't work, you do have other options: You can either refinance your home through the federal government's Home Affordable Refinance Program (HARP) or you can request a modification of your loan, both of which would result in a lower monthly mortgage payment.

HARP is designed specifically for homeowners who are underwater. Under the program, the government provides lenders with financial incentives to encourage them to refinance the home loans of owners who don't have the typical 20 percent equity.

You do have to meet certain rules to participate in this program, though. The most important is that you must be current on your mortgage payments and you must not have missed any payments in the last 12 months.

To participate in the program, contact a mortgage lender licensed to perform refinances in the state. The lender will guide you through the steps to close a HARP refinance.

If a refinance won't help - maybe your mortgage interest rate is already at a low level - you might be able to rely on the federal government's Home Affordable Modification Program (HAMP). Under this program, lenders receive incentives from the government to lower the monthly mortgage payments of homeowners struggling with a financial crisis. Lenders can do this by forgiving a portion of homeowners' principal loan balances, reducing their interest rate or reworking the terms of their loan.

Again, though, you'll have to meet certain requirements.

You must owe no more than $729,750 on your home and you must have taken out your mortgage loan on or before Jan. 1, 2009. You must also either be delinquent on your mortgage payments or in danger of falling behind on them.

You also must be able to prove that you can no longer afford your mortgage payments. You can do this by showing your lender copies of your most recent bank-account statements, paycheck stubs or tax returns, anything that shows a drop in your regular income.

HAMP not the only option for loan modifications

To participate in this program, contact your current mortgage lender. And even if you don't qualify for a modification under HAMP, you might still be able to convince your lender to modify your mortgage loan on its own without the financial assistance of the federal government if you can prove a financial hardship.

This isn't an easy task, but your lender might prefer to receive at least some income from you each month. If you can't afford your current mortgage payments, your lender might end up receiving nothing.

You'll never know, though, unless you call your mortgage lender and ask for assistance.

"The thing that irritated me the most was when I'd call homeowners up after they started missing payments and they'd tell me that they were afraid to call us to ask for help," Frommeyer said. "Why? The worst we can do is tell them 'no.' But we might be able to help. Pick up the phone, call and ask the question."

Published on September 2, 2014