You are struggling with your home loan payments and you have decided to ask your loan provider for a mortgage modification to reduce the terms of your loan. In such case, you should approach the home loan company asking for their cooperation by presenting an outline of your reasons for such request. A home loan hardship letter elaborates your present financial situation.
Here are some helpful tips on how to write a home loan hardship letter:
1. Contact the mortgage company and as for the home loan modification department. Request for the name, contact information, and address of the manager assigned to your mortgage. Make sure the spelling is right. At the top of your home loan hardship letter, include your contact information as well as your loan number.
2. Write in a formal style and express what you are requesting for, whether it is interest rate or a reduction in your loan balance. Provide a history or record of your on-time payments prior to your financial difficulties at present. Let the manager know that you really want to keep the property and you're willing to make sacrifices for it. Request for a short-sale approval and provide explanation as to why such is better for you, as well as for the loan provider, as it could avoid very pricey foreclosure.
3. Describe your circumstances which resulted in late payments: you lost a source of income, you lost your stable job, or your ARM or Adjustable Rate Mortgage has risen beyond your capacity to pay. Explain how your savings are drained, maybe because you've become a victim of a swindler financial company, your pension was gone, or your investment plan has gone wrong.
Provide your employment history which shows that you have worked hard and that your present situation are not ordinary as your credit history proves your diligence before your financial struggles.
4. Outline the special situations which require that you stay in your current house: an elderly parent resides nearly who needs your regular care, or a special or disabled son or daughter attends a local school which caters to his or her special needs.
5. Explain your plan on how you can recover from your financial hardship: you are looking for a second job, or close relatives are willing to assist with expenses.
6. Try not to be exaggerated in expressing your current despair and worries, but make sure you let your lender know that you are presently in a very difficult situation and are doing everything to overcome it.
To get free advice on home loans or other financial matters, such as banking and credit, visit Consumer Credit Legal Service by following the links provided: http://cclswa.org.au/topics/financial-counselors/.
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