Restructuring second mortgage

April 27th, 2010 |

Due to slow down in economy many mortgage buyers are unable to keep up their monthly mortgage payments. Especially, with increased unemployment rate prevailing across the nation, foreclosure rate is constantly moving up. As the foreclosure causes the homeowner to lose home, many try to avoid foreclosure in difficult situation of inability to pay bills.

There are many options for homeowner to avoid foreclosure. Restructuring mortgage is one such option. Restructuring a mortgage is noting but changing the present terms and conditions, usually to accommodate your budget that allows you to pay off the mortgage bills regularly.

The obvious reason to restructure mortgaging is to save home or stop foreclosure that homeowner may face instance of not paying the monthly payments on time. You being here we realize that you are in financial troubles and looking for information to save your home.

Even if of restructuring the mortgage, the lender is particularly very strict about forgiving the amount and will depend on the home owner’s financial situation. Restructuring process is as follows.

Similar to first time homeowner, a homeowner attempting to restructure mortgage has to prove his affordability or in affordability for new monthly payments. Therefore start gathering evidence that proves that you are facing financial difficulties and submit them as a proof of evidence when you approach your mortgage lender for restructuring.

The evidences include last 3 to 6 month’s pay checks if you are still working and earning much lesser pay. You might also have your most recent tax returns, savings and checking account statements, credit card bills, student loans, personal loans, auto loans and documents related to any other kind of debt you owe. Once you have all the papers related to your debt make, copies of them and submit to lender you are approaching.

Having all the papers related to debt is not enough instead one must be capable to take your hardship to lenders. Draft a financial hardship letter. As the name suggest, it is a letter that describes the reasons you are looking to restructure your mortgage. Include the reason you lost the regular income that affects your monthly payments. The reason includes loss of job or your employer might have slashed your working hours or suffering from serious medical illness. Whatever may be the reason make sure to include in your request letter to restructure the mortgage or loan.

Contact your mortgage lender and convey your hardship to them. You can contact them over phone or in person. You can find the contact number in the recent statement of mortgage from your lender and ask to connect to concern person for restructuring. Explain the reason you are approaching them and what do you expect out of them to save your home during your financial setback.

After speaking to concern person over phone send the drafted financial hardship letter and necessary papers that support your statements.

If you are successful in convincing your lender, then your lender may reduce interest rate, lengthen or shorten the term of your loan or even reduces your principal balance as a result your monthly payments may come down to level that you can afford comfortably.

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