In these difficult economic times, many of you are having a hard time keeping up with all the rising costs and regrettably making your mortgage payment is getting difficult or impossible to pay. If you find yourself in this situation it may be time to renegotiate your mortgage terms. Most mortgage lenders don’t advertise this service but if you were their customer, they would rather renegotiate your mortgage terms than have you foreclose on their loan. All parties lose in a foreclosure. It is much easier for your lender to justify the renegotiation of your loan than to lose you permanently as a customer through foreclosure.
To justify to your lender that you need to renegotiate your mortgage terms you must provide compelling proof that without the renegotiation, you will likely be unable to continue making the current monthly mortgage rate. In fact, you may already be delinquent on your monthly payment schedule.
You will need to send your lender a hardship letter that describes in detail your current economic plight and how a lower monthly mortgage payment or other remedy will enable you to continue to stay in your home. The lender will also need documentation in the form of pay stubs, W2′s, disability statements, doctor’s bills and other relevant information that proves you have a legitimate reason for requesting new loan terms.
Once your lender analyzes your submitted materials, he/she will decide if you qualify to renegotiate your mortgage terms and what course of action should be taken to help you out of your present situation. If you are behind in your mortgage payments your lender may decide on temporary methods to help you get back on track. These include: forbearance, reinstatement or a repayment plan.
Forbearance allows you to suspend of reduce your mortgage payment for a short period of time then pay it up to date with some other option. Reinstatement allows you to not pay your mortgage for a period of time then become current with a lump sum payment in the future. A repayment plan involves making your current payment schedule with a little extra of the past due payments added in each month.
A more permanent plan to help you out of your financial distress is to actually renegotiate your mortgage terms. This is the best form of help because there will substantive changes made to your mortgage loan contract that will make it more affordable for you in the long run. If you have all your documentation well presented and a sympathetic lender you should be able to get better mortgage terms that will help you out financially for years to come.