How to Ask the Bank to a Reduce Mortgage
If a recent financial hardship is making it difficult for you to pay your mortgage bill each month, you need to call your bank or lender immediately. If you can prove that your gross monthly income has dropped, while your monthly debt obligations have not, your bank might be willing to reduce the principal balance of your home loan. This could result in a lower monthly mortgage payment, and could be the financial relief you need to avoid defaulting on your home loan. Banks are even being encouraged to lower the monthly payments of struggling homeowners by the federal government. In 2009, the government launched its Home Affordable Modification Program, which provides financial incentives to banks and lenders who modify the loans of homeowners struggling to pay their mortgage bills each month.
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Things You'll Need
- Copy of your current mortgage loan statement
- Copies of your 2 most recent paychecks
- Copies of your credit card bills
- Copies of any student, car or personal loan statements you may have
- Copies of your bank savings and checking account statements
- Copies of unemployment checks, if you are unemployed
Instructions
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Build a case that you can no longer afford your current mortgage payments by collecting and copying the financial papers that verify that your gross monthly income has fallen while your monthly debt obligations have remained constant. You can prove your current income level by copying your last two paychecks if you are still employed or your unemployment checks if you are not. You can also copy your bank savings and checking account statements. To prove your monthly debt obligations, make copies of your credit card bills and other loan statements.
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Write a hardship letter. This letter puts into writing the reasons why your mortgage payments are no longer affordable. You might have lost your job, suffered through a serious injury or illness, or had your hours reduced. Your employer may be saddling you with several unpaid furlough days. Whatever the reason, list it in your letter. Also include your request that your bank reduce the principal amount of your loan.
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Call your bank's home loan department at the number listed on your current mortgage statement. Tell a loan officer that you have recently suffered a financial hardship and can no longer afford to make your monthly loan payments. Explain what the hardship is, and request a reduction in your mortgage principal.
Ask your bank if it is participating in the government's Home Affordable Modification Program. A bank doesn't have to participate in the program to modify your loan, but it might speed up the process if it is.
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Send by mail, email or fax your financial hardship letter and the copies you made earlier. You'll now have to wait while your lender determines the severity of your hardship and whether you can still afford your monthly payments.
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Agree to a loan modification that reduces your principal balance if your bank approves your request. Your bank, though, may not go this route. Banks can lower your monthly payment by reducing your monthly interest rate or changing the terms of your mortgage loan. Just make sure that you'll be able to afford your new payment after your loan is modified. You don't want to be asking for yet more financial relief in the near future.
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References
- Photo Credit bank image by Pefkos from Fotolia.com
