How to Get Your Mortgage Payment Lowered If You've Had a Financial Hardship

You can speak with your lender about a lower mortgage payment.

A financial hardship can take a toll on a homeowner's ability to successfully pay his monthly obligations. Lowering a mortgage payment could be a starting point toward financial restoration, since a housing payment is typically a borrower's largest monthly expense. After viewing your financial situation, your lender might decide to reduce your mortgage payment. You can contact your lender to discuss refinancing or other solutions that may lower your mortgage payment.

Instructions

1. Call your mortgage lender's customer service department to seek help toward obtaining a more manageable monthly payment. Inform your mortgage lender of a financial hardship that has decreased your ability to submit the required monthly payment.

2. Write a letter that allows your lender to review your situation. Explain the circumstances that led to your financial hardship and whether the problem has been resolved or still exists. Include details that reveal your financial challenges, such as lost wages, a medical injury or changes to your mortgage payment. Describe whether an increased escrow requirement or an adjustable-rate mortgage increase has stretched your budget too far.

3. Ask your mortgage lender about options for lowering your monthly payment. Mention in your letter that you wish to keep your home and would like to be considered for in-house or government-sponsored loan modification programs.

4. Gather documents for your lender to evaluate, such as a list of your expenses, two years of tax returns, two recent pay stubs or other requested items. Mail your hardship letter and the requested documentation to your mortgage lender.

5. Call your lender to check the status of your inquiry for assistance and to request a payment plan or a temporary payment reduction to help restore your financial footing. Your lender may provide a forbearance plan or a short-term payment arrangement to get your mortgage loan caught up. Check with various departments within your lender's servicing division. Ask to speak with customer service representatives, collections representatives and loss mitigation specialists to ensure that you have pursued several options toward lowering your mortgage payment.

6. Make an appointment to have your information reviewed with a HUD counselor (see Resources). After meeting with a HUD counselor, you might receive other suggestions toward getting your mortgage payment lowered.

References

• The Federal Reserve Board: A Consumer's Guide to Mortgage Refinancings
• Federal Trade Commission: Knee Deep in Debt
• "The New York Times"; Negotiating Better Terms For Mortgage; Ron Lieber; November 2008

Resources

• U.S. Department of Housing and Urban Development: HUD Approved Housing Counseling Agencies