How do I Modify My Mortgage Interest Rate?

A mortgage modification involves changing one or more of the terms.

A mortgage modification involves a change to one or more of the mortgage loan's terms, like the interest rate. A lower interest rate generally means a lower monthly payment. A mortgage modification is an ideal solution if you're struggling to pay your monthly mortgage. Although you can find numerous agencies offering to help you lower your mortgage rate, you can normally request a loan modification yourself, but it's important to follow the proper steps.

Instructions

1. Contact your lender's loan modification department if you're at least 90 days behind on your mortgage.

2. Demonstrate financial hardship. Explain why you need a mortgage interest rate modification. Extenuating circumstances, such as loss of employment and health problems are often acceptable reasons.

3. Write down the name, title and phone number of the person who helped you. The date is also important. It gives you credibility if you have to refer to your records in the future.

4. Follow the telephone conversation with a letter. Outline the points discussed during your telephone conversation. Address the letter to the loss mitigation department and send it by certified mail.

5. Refinance your mortgage if you don't qualify for a modification. If you have a high interest rate, a refinance might be advantageous. Beware, however, that a refinance involves paying off your current mortgage and taking out a new one.

6. Consider hiring a real estate attorney if your lender won't discuss the possibility of a loan modification. If you're already behind on your payments, waiting too long could result in foreclosure. An attorney can identify any loan violations, which often compel lenders to work with your situation.

Tips & Warnings

• If you're unable to get help through your lender, contact a Housing and Urban Development counselor at [phone].

• Beware of agencies that charge fees to help you reduce your mortgage interest rate.

References

• CNN: Modifying Your Mortgage

Resources

• The White House: Help for Homeowners