How to Adjust Mortgage Rates without Refinancing

If you own a home and you want to adjust your mortgage rate you don’t always have to refinance the mortgage loan. If you have a higher interest rate than what is currently offered, you might want to speak with your lender about lowering your rate. The rate of interest you pay is reflected in your monthly mortgage payment. If you have a high interest rate you have a high payment. The lower your rate of interest on your mortgage the lower your monthly mortgage payment will be. Refinancing is one option you might consider but the costs associated with refinancing are fairly high. The other option is requesting a mortgage modification from the lender to lower the interest rate without going through the refinance process.

The following steps are moderately difficult, but you can work through them if you go slow and follow them exactly. Find your bank statements, your pay check stubs, and your mortgage information.

Step 1: Get started early before you have a financial crisis that will hinder your approval for the lower rate. Call the lender that has your mortgage and ask to speak to the homeowner’s retention department or the loss mitigation department. They have different names with different lenders but they perform the same function.

Step 2: Make sure you have the financial documents that accurately reflect your financial situation. The purpose of loan modification is to help the home owner who is struggling financially to retain possession of the home and decrease the loss to the lender in case of default. If you financial crisis was due to unexpected illness with large medical bills to pay or because you are getting a divorce and your household income will drop, you will need to include these documents with your information too. All this information that you provide will help the lender determine your qualification for the loan.

Step 3: A default on your mortgage is when you have not made the required payments in a specified amount of time. This is definitely something that you will want to avoid at all costs. It is a no win situation. For this program you must be behind on your mortgage in order to qualify. When you have stopped making the payments on your mortgage your lender will notice and begin calling and sending out notifications to find out why.

Step 4: If you want something from a lender the best approach is a professional one. Cursing and yelling will not encourage the lender to respond to you in a positive way. Be polite, speak calmly, and be succinct while negotiating with the lender.

Step 5: You will be disappointed if you go into the process with unrealistic expectations. You will not be allowed to adjust the mortgage just because you called and you think that you have a good reason for the request. Also, you are in financial problems. This is precisely why you are asking for help. You will not get the lowest interest rate on the market. You are a big risk to the lender. If you have a rate that is close to the current market rate, you lender may not agree to a further reduction in your interest rate.