Four Tips For Renegotiating Your Mortgage

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Renegotiating a mortgage is something that may become an inevitability. Financial situations change, you might have to make career moves, and adjustments to your lifestyle—all of which can cause you great inconvenience—and unfortunately, you may end up being unable to pay your mortgage. Taking preventative measures will give you the peace of mind you need to ensure that you don't lose your mortgage and the confidence you need to facilitate a quicker approval process with your lender. In this article, we’ll explore four important tips on how to renegotiate your mortgage successfully. 

Make sure you’re on top of communication 

Stay on top of any calls from your lender. Ideally, you'll keep in contact with your lender before your mortgage payments start to fall, but at the very least, once renegotiation plans begin, you need to be reachable. If you miss calls from your lender, call back right away and ask to speak with the loss mitigation department. The main reason you might renegotiate interest rate mortgage is to make your payments easier for you with reduced interest. As you work with your lender, remember to reinstate this point to develop the best renegotiation plan for you and your specific needs. 

Once you begin working with your lender, they will likely ask you for specific paperwork to go along with renegotiating your mortgage. You'll need to create availability in your schedule to go over and sign forms and provide insight into your financial situation. The better you are at staying on top of your planning, the faster the process will come together. 

Understand all documents 

Assuming your lender agrees to renegotiate your mortgage, it's up to you to read and comprehend the new terms correctly. If you need help, contact your housing counselor and schedule a meeting to go over the new mortgage terms. Once the information is understood and agreed upon, sign the latest documents and give them back to your lender. 

Contact your local agency 

Get in touch with a HUD-approved agency. They can offer you affordable (and sometimes free) advice on how to go about renegotiating your mortgage, as well as find specific mortgage aid to help you get back on your feet. Housing and Urban Development agencies are located across the country, so be sure to visit their website to find agents available to help you in your state. 

Speak with your lender

Be ready to speak with your mortgage lender. Have all the necessary documentation at hand, including all the paperwork tied to your mortgage. Before your conversation, you might make a point to refamiliarize yourself with the specifics of your mortgage so that you can better explain your plan for renegotiation and the reasons you are deserving of this change. Show your lender this information, and don't forget to include income statements and a thoroughly spelled-out household budget. If you happen to be in a situation where you are building wealth and paying down debt, show your lender the new mortgage quotes that offer better deals. If you are a freelancer with fluctuating income, your lender will need to know that. Don’t leave out any critical information. Your lender will want to see that you've taken the initiative and the responsibility to build a mortgage recovery or improvement plan on your own. 

The Bottom Line 

Renegotiating your mortgage is a long process, but it's worth the hassle when it means the difference between keeping or letting go of your home. Follow these tips to create a renegotiation strategy that will work with your lender and any other lenders you might work with down the road.

Disclaimer: the content presented in this article is for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.