If You Fall Behind on Home Mortgage Payments …

… don’t panic.

With bad credit mortgages resetting to higher payments around the nation, this is a common dilemma for owners. But there are steps you can take before defaulting on any home loan payments.

For example:

• Contact your mortgage company to see if you can modify the terms of your loan, work out a new payment plan, if only temporarily, or refinance the loan with more favorable terms.

• Make an appointment with one of the many counseling agencies approved by the federal Department of Housing and Urban Development. They can help you work with your mortgage company and give you advice on what direction you should take.

• If there’s no way to rework the terms of your mortgage or refinance home loans, talk to your lender about doing a short sale in which you sell the property for less than what is owed. That way, you may be able to avoid tarnishing your credit with a foreclosure on your record. Some taxes, however, may be owed on the remaining part of the debt not covered by the short sale.

• If you have large car payments, get them reduced. Get a used car with a lower payment or refinance your current payment.

• Pay your mortgage before you pay your credit cards. “One of the biggest mistakes people make is maintaining their payments on their credit cards and not making their mortgage payment,” said Gabe del Rio of Community HousingWorks. “Keeping a perfect mortgage history will keep mortgage options more open.”