This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How to Renegotiate a Mortgage

Document all conversations with your lender, including the name of the individual you speak to, the content of the conversation and the time of the call. If you speak to someone who is particularly helpful, ask for his or her extension in case you need additional information later.

Possible solutions: If your lender decides that you qualify, there are a few ways it can modify your loan. It can, for example, lower your rate to current levels as reported by Freddie Mac (FRE). Your principal is re-amortized at the new rate, meaning the amount you owe on your old mortgage gets rolled over into a new loan and paid off at the new rate. That may bring your monthly payments back in line with the target DTI of 38%.

If your DTI is still too high, your lender can lower your rate even further -- down to as little as 3% -- and then schedule specific rate increases over the next few years. These increases, or rate steps, will eventually bring your rate back up to the rate that was current when you signed your modification agreement.

Alternately, your lender can change the duration or principal of your loan in order to lower your DTI. Extending your loan's term from 30 to 40 years, for example, can reduce your monthly payments. Or your lender may suggest principal forbearance, in which case it sets aside a portion of your loan principal interest-free, to be paid back in full when you refinance or sell your home.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
HBC $0.00 0.00%
BAC $18.16 1.57%
C $58.92 0.94%
JPM $68.94 1.31%
AAPL $122.99 -0.32%

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs