Behind on Mortgage Payments? How to get your bank to Give you a Fresh Start

If you are behind on your mortgage payments the first thing you need to do is get in touch with your lender or loan servicer and let them know you are having a problem. It is very costly for a lender to foreclose on your home and with so many foreclosures in the last few years, lenders are more willing to work with you then ever.

What to say to your Bank

When you know you are falling behind on your mortgage payments or are already 2 months behind on mortgage payments this is when you must contact your lender. It is important that you provide them with a reason that tells them you are not able to make your payments right now but if they provide a lower payment, lower rate, or lower principal balance that you will be able to make the payments. This is called a loan modification and most lenders are currently offering to modify your loan in one way or another if you can show them you are having a hardship. They will also require that you provide backup documentation and financial information to support your hardship. Ask them what the requirements are to apply for a loan modification and provide everything they request in a timely manner.

If you want an easy step-by-step guide on how to quickly apply for and negotiate a loan modification download our eBook now: Loan Modification eBook

What will your bank do to help?

The quick answer…. more than you think! The government and most banks are offering more loan modification programs every day. The government programs are incentivizing banks to provide lower rates, longer terms, and in some cases principal reductions. Banks that took bailout money are also required to give loan modifications to qualified borrowers, making the possibility of getting a loan modification even more likely. In most cases your bank will not come right out and tell you what they can do, but rather want to look at your financial situation and your hardship and offer you a loan modification based on those circumstances.

If you are behind on your mortgage you can ask the bank to give you a forbearance, which means they put your past due payments onto the back of the loan, so you can start making payments with a clean slate. You will need to show them you can make the mortgage payment once they give you the forbearance. You do this by calculating your debt to income ratios based on their guidelines. In most cases they want to see your new mortgage payment does not exceed 31% of your gross income.

If you need a worksheet that calculates your debt to income ratios that you can print and send to your lender it is included in our book which you can download here: Loan Modification eBook

Each bank is different in how they handle you when you are behind on your mortgage so the best approach is to always be well prepared when you speak to them and know what they want to see in order to approve you for a loan modification. Our ebook provides everything you need to properly prepare and submit your loan modification package, click here to download it now: Loan Modification eBook