How to Negotiate Existing Mortgage Rates

Negotiating your existing mortgage rate can save your home from foreclosure. Changing the current rate on your home loan will likely reduce your monthly payments. Thus you would have more money to take care of other necessities of life. There are other ways to reduce an interest rate, such as a mortgage refinance. But when your credit score is low, or if you don't have the income to qualify for a refinance, a renegotiated mortgage is the next best thing.

Things You'll Need

• Copy of paycheck stub
• Hardship letter

Instructions

1. Call your lender. Speak with someone from your mortgage company to see if they offer modified home loans or renegotiated mortgages. If so, inquire about the requirements.

2. Review your finances. Before approaching your lender to start the process of negotiating your existing interest rate, figure out how much you can afford to spend on your mortgage each month.

3. Plan ahead. Pull out old paycheck stubs from the past few months to show your lender. The decision to modify your mortgage loan is based on your income and percentage of your income spent on mortgage payments.

4. Write an honest hardship letter. Put your financial struggling in writing and present your lender with a hardship letter. Be precise and truthful. Do not fabricate in order to sway the lender's decision.

5. Present information to your lender and be patient. Lenders will review the submitted information and make a decision. The time frame for a decision varies by lender.

References

• Bankrate: Mortgage Modification Help
• Bankrate: Can You Get an Obama Loan Modification