How To Renegotiate Your Mortgage

If you're like many people today, you're feeling the hurt of the economy. It's probably buried down deep in your wallet, eating at you every single time you go to the grocery store or fill up on gas.

Something has to give... Doesn't it?

Many people turn to trying to save money. One way to do that is to renegotiate your mortgage and lower your monthly payments on your home loan. Obviously, the money you would save from that could help you out all over your financial life.

So, how do you do it?

The basic steps to renegotiating a mortgage are:

Step 1: Contact your bank

• Contact your bank with the necessary documentation. This is often called a workout package and requires documents such as financial statements, bank statements, loan documents, etc.
  
• Apply for a loan modification USING THEIR SYSTEM. This is problematic because every single bank does it differently and if you're like many homeowners, you have a first and second mortgage. This makes things very difficult and time consuming.
  

Step 2: Wait

• After you submit your paperwork, your bank will assign you a loss mitigation specialist or renegotiation specialist. It will often times take up to 4 months for them to assign someone to your case

Step 3: Haggle

• Banks are not in the business of losing money, so you will need to be a strong negotiator. More times than not, a bank will tell you that you need to be late on your payments before they will even work with you... This is something you may or may not have to do.

Step 4: Accept collateral damage

• If you choose to go late on your payments, understand that you will most certainly have black marks on your credit report. What is more important to you, a lower monthly mortgage payment, or a few dings on your credit? Often times negative marks can be removed by a competent credit repair agency.
  

Step 5: Get approved - maybe.

• Yes, sadly, going through all of that trouble doesn't even guarantee that you will get a mortgage renegotiation. There is a significant chance that you will have spent a decent amount of time, energy and money and end up with nothing to show for it... It's just a sad fact of this process.
  

Other solutions:

• Hire a competent professional that is well versed in the industry and can go to bat for you.
  
• Keep paying your high payments
• Try again from the beginning.

I hate banks, don't you? :-/