If paying your mortgage seems like an uphill battle that you have to endure every month, consider requesting for a mortgage write-down. However, it won’t be as easy as you think it would be. Depending on your situation, the process may require you to go through a needle hole or if proper documentation is provided the whole process will just be a breeze. Read the following information about mortgage write down and see how you can make it achievable.
What is meant by mortgage write down?
A mortgage write down is a term used to describe a lender’s act of reducing the principal amount of a mortgage loan. An individual may be granted a mortgage write down once found eligible. Eligibility for mortgage write-down will be achieved once the person was found to have real inability to pay the mortgage for certain reasons.
How to Achieve a Mortgage Write Down
Show proof of your financial hardship.
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It is easy to tell your lender that you’re going through a very tough financial situation that’s why you need a mortgage write down.However you must show proof of this. To start, you must first write a letter expressing your hardship by stating all the reasons why you find it hard to pay your current monthly mortgage. It could be that you or your spouse lost his or her job. Other reason may include salary reduction because the company you’re working for is suffering from a huge financial crisis. Some people also file for a mortgage write down after experiencing an accident and won’t be able to work for a long period of time. Make sure to attach proof of your reduced income, unemployment checks or pay stubs that show your inability to pay your current mortgage.
Request for Principal Balance Exclusion
A mortgage write down is often refused by conventional mortgage lenders. But there are also banks that offer special mortgage programs. One example of this program allows an individual to move a portion of his mortgage principal balance to a certain account that is interest-free. As a result, the person will now have lower monthly mortgage payments because a portion of his principal balance have been subtracted from his mortgage loan. If you’re making timely payments on your non-excluded mortgage balance then chances are you will also be seeing your excluded principal balance sitting in interest-free accounts gradually eliminated.
Apply for Flex Modification Program
For those whose mortgage were actually owned by Fannie Mae and Freddie Mac they can also be eligible for loan modification a.k.a mortgage write down. This program by the federal government provides refinancing opportunities and loan modification for people whose mortgages were owned by Fannie or Freddie Mac.To be able to find out whether your mortgage is actually owned by these entities, use their online lookup tool.If yes, then you automatically become qualified to apply for the Flex Modification program which could lead you to have reduced interest rate for your mortgage loan and/or an extension of your loan term. This Flex Modification program is a replacement of the Home Affordable Modification Program that has already expired. Under the Flex Modification program, eligible borrowers can avail of the 20 percent reduction of mortgage payment.
To reiterate, one can only become eligible for mortgage write down if proven to have financial difficulty in paying the mortgage loan. So, if you’re considering filing for a mortgage write down, gather your proof or supporting documents first.