If you find yourself facing the prospect of being unable to meet your home mortgage loan obligation on a consistent basis you may wonder what options are available to you. A key to getting control over your home mortgage loan is taking a proactive stance. For example, you can consider seeking a loan modification from your lender. Towards this end you need to understand how to ask for an interest rate reduction on your mortgage loan.

Loan Modification Documents

In seeking an interest rate reduction from your mortgage lender, obtain the standardized forms that your lender utilizes for loan modification. Included in these forms will be a standard application for a loan modification. A key element of these documents is a financial worksheet. Complete the financial worksheet, setting forth your average monthly income and the essential expenses that you incur each month. The challenge with the financial worksheet is demonstrating that although you have reliable income, you are best able to satisfy the terms of the mortgage loan if you receive a loan modification--specifically a reduction in the interest rate.

Face-to-Face Presentation

Although you may be inclined to attempt a loan modification by sending in documents and using the telephone, you enhance your chances for obtaining a reduction of the interest rate on your mortgage loan with a face-to-face meeting. If your home mortgage lender is located in your community, schedule such a session. Send the standard documents provided by your home mortgage lender to the individual you are scheduled to meet with in advance of the meeting. You do not want to spend the entire face-to-face meeting merely reviewing documents with the lending agent.

Default and Bankruptcy

If you really require an interest rate reduction on your mortgage loan, you need to be willing to take a firm stand with the mortgage lender. You may need to directly advise the lender that if you are not granted a reduction in the interest rate you likely will have no choice but to default on the loan and seek bankruptcy protection. A mortgage lender may be willing to negotiate a lower interest rate in order to avoid the time and expense associated with responding to a bankruptcy filing by you.

Source:

"Loan Modification For Dummies"; Ralph R. Roberts, Lois Maljak & Joe Kraynak; 2009

"Loan Modification Made Simple: An Insider Guide to Understanding Loan Modification And Preventing Foreclosure"; Thomas Powell & Yamen Elasadi; 2008

More Information:

U.S. Department of Housing and Urban Development: Loan Modification FAQs