When you take a mortgage loan, the lender will review your credit history and payment capacity during the underwriting process. The approval is only given if you are capable of returning the loan through your income and have a record that shows reliability with regard to debts. Unfortunately, your financial situation can change unexpectedly. In simple terms, your ability to make the mortgage payments can decline, leaving you in considerable distress. If you are facing significant financial problems, you should consider writing a hardship letter for a mortgage. This is a document which is designed to explain the situation to your mortgage lender. There are different purposes of hardship letters. In the modern market, these are primarily used for requesting your lender for a loan modification or a short property sale. If you decide to prepare the document, consider this guide to help you during the process. Need Help on lowering you Mortgage
Understanding Eligible HardshipsBefore starting on your hardship letter, you should understand that not every financial problem qualifies for this form of lender assistance. In simple terms, you must prove that you have experienced a valid hardship and the situation has compromised your financial capacity. Here are some of the primary hardships that almost every lender accepts as a genuine hardship.· Employment Problems: There are common job issues which can affect your financial situation.
The valid hardships in this category include layoff, wage reduction, loss of overtime and relocation.
- Business Issues: You can make the application if your business has faced an economic crisis or has failed completely.
- Family Situation: Valid hardships include divorce or separation, the birth of a child or death in the family. If this is your case, you should be able to show the effect of the incidents on your finances.
- Illnesses: If you or your family members are injured and sick or struggling with problems such as drug dependency and gambling, the lender might consider the hardship letter.
- Other financial issues: These can include accumulated debts, payment shock, and incarceration of your home’s earners.
Critical Information to include when you are writing your hardship letter for a mortgage, there are some important questions that you must answer. The information is crucial if you want the document to work in your favor.
Here are some of the issues that you must address in your letter.
- The circumstances or series of events resulting in hardship.
- The dates of the hardship.
- The permanence of the financial difficulties or projected time for resolution.
- The total amount of unpaid mortgage bills.
- The steps being taken to resolve the problem.
Finally, when drafting your hardship letter, you should remember to keep the document short and precise. One page is usually sufficient, and too much information can be overwhelming to the recipient. You can also make your letter more clear by underlining critical details such as the dates, quoted amounts, and steps taken towards a resolution. Get Help Lowering your Mortgage
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