How to Ask for a Lower Rate With Your Current Mortgage Company Without Refinancing
More than 360,000 U.S. housing units received foreclosure notices in November 2009, according to foreclosure data company RealtyTrac. That figure was up 18 percent from one year earlier. To help reduce the number of foreclosures, the Obama administration in 2009 launched its Making Home Affordable Program, which offers financial incentives to encourage mortgage lenders to modify the existing home loans of homeowners struggling to make their monthly mortgage payments. Thanks to this program, if you are struggling to pay your mortgage each month, you might be able to gain a lower interest rate on your loan, which will lower your monthly payment, without having to refinance.
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Things You'll Need
- Your most recent mortgage statement
- Copies of your most recent paychecks
- A written list of your monthly income and expenses
- Copies of your bank checking and savings account statements
- Copies of your credit-card bills
Instructions
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Call your mortgage lender. You can find your lender's phone number on your most recent mortgage statement.
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Ask to speak to a loan specialist about reducing your mortgage loan's interest rate. Explain that you are having trouble paying your mortgage bill each month.
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Explain to a loan specialist exactly why you are struggling to pay your mortgage bill. Legitimate reasons might include a job loss, drop in annual income or serious and costly illness or injury.
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Tell the loan specialist that you'd like a lower mortgage interest rate to make your mortgage payments more affordable.
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Send in documents proving your current financial situation. These papers might include copies of your most recent paychecks--if you are still working--your most recent credit-card statements and your bank savings and checking account statements.
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Write a hardship letter explaining in detail why you are struggling to pay your mortgage. Mail it to your lender. The lender will then decide whether to lower your interest rate--without requiring you to refinance your loan--or leave it where it stands.
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Tips & Warnings
Don't be shy about calling your mortgage lender to ask for help. The federal government is encouraging mortgage lenders to do what they can to keep people from missing mortgage payments and, eventually, losing their homes to foreclosure. Your lender should want to keep you in your house, even if that means lowering your mortgage interest rate. For more information about the government's loan-modification efforts, visit the Web home of its Making Home Affordable program. A link is in the References section.
Only work with your current mortgage lender. It is the only one that can lower your mortgage interest rate without forcing you to take out a refinance.
