How to Get Your Mortgage Company to Lower Rates During a Crisis
You've paid your mortgage loan payment on time for years. But now you've lost your job, suffered a serious illness or seen your annual income plummet. Suddenly, you're struggling to make those loan payments that once seemed so affordable. Fortunately, you can ask for help from your mortgage lender or bank, which might agree to lower your interest rate. This will will drop your monthly mortgage payment, sometimes by more than $150 a month depending on the rate drop and the size of your home loan. You'll need to prove to your lender, though, that you really do need assistance.
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Things You'll Need
- Copies of your two most recent paychecks, if you are still getting them
- Copy of your most recent federal income tax return
- Copies of your credit card statements
- Copies of your other loan statements, such as car and student loans
- Copies of your savings and checking account statements
- Copies of your retirement savings account statements
- A hardship letter
Instructions
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1
Put together a compelling case that proves to your mortgage lender or bank that you need an interest-rate drop to continue making your monthly mortgage payments. Compile the paperwork that proves your monthly income and debt. This includes copies of your two most recent paychecks, most recent federal income tax return, credit card and other loan statements, and retirement savings account statements.
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2
Call your mortgage lender, using the number on your most recent mortgage statement, and explain that you are struggling to make your mortgage payments and are in need of a lower interest rate. Ask, too, whether your lender is participating in any federal government loan-modification programs. This might speed up the process, though government programs aren't necessary for a rate reduction.
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3
Write a hardship letter. This letter will explain why are struggling to make your mortgage payments. You might write that you lost your job, suffered through a costly illness or saw your annual income drop significantly. You might even suggest a payment that you think would be acceptable.
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4
Send your financial paperwork from Step 1 to your lender by mail or fax. Your lender will look at this to determine if you truly are in financial danger of not being able to make your mortgage payments. At the same time, send the hardship letter to your lender by fax or mail. This will provide your lender with the explanation of why you are suddenly struggling to make your mortgage payments.
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5
Agree to a new rate if your lender accepts your request.
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Tips & Warnings
A reduction in interest rate might not be the only way to lower your mortgage payment. Your lender might instead restructure the terms of your loan to drop your payment or reduce your principal balance.
