Hardship letter to restructure mortgages

The restructuring of a mortgage, known as a loan modification is the process of changing the loan terms more favorable to the borrower agreement. Commonly it granted when the borrower is experiencing financial difficulties. In order to restructure a mortgage you may have to write what is called a hardship letter loan for the lender to consider it

The restructuring of a mortgage

The restructuring of mortgage loans is the evaluation of an existing loan to change it and make it more affordable for the borrower; It is a permanent change. The changes may include reducing the balance, reducing the rate or extending the mortgage term to lower the remaining payments. It allows the borrower to avoid foreclosure. The terms of a loan restructuring or modification can vary by lender.

Loan Modification Request

In order to receive consideration for restructuring the mortgage loan, the applicant should contact the lender with a phone call to start the process. The lender will ask questions related to income, financial situation and assets of the bank to help make a decision on whether or not the modification request is approved.

Before finalizing this request, the borrower generally must file a written letter describing the situation. It’s a good idea to for borrowers to seek advice from a lawyer of the family when it comes to making a loan modification, as this can be a complicated matter.

Hardship letter

A hardship letter is a note to the lender regarding loan restructuring application. It detailed exactly why the borrower needs to change and how you will pay the house in the future. Common causes of financial difficulty include loss of employment, reduced working hours or a draft law that puts unexpected major crisis household income of the borrower.

What to Include

When writing a letter of difficulty must include the exact details of your financial problems. First, the borrower must identify the type of difficulties, such as a divorce situation, loss of employment or military service. The lender needs to know why the borrower has struggled to make payments and has every intention of complying with the terms of the new mortgage.

If the situation is temporary and the borrower believes that will change in the near future, you must provide this information as well. Finally, a hardship letter must include an itemized household budget so the lender can review your expenses compared to income.

Cost of mortgage subrogation

If we want to change the mortgage bank to improve conditions for the first cost it is the commission of subrogation that we pay to our current bank. This committee is regulated by law and cannot exceed 0.50% if the mortgage has up to 5 years of life and 0.25% if mortgage leads signed 6 or more years. According to the bank and the conditions of the current mortgage you can get a 0% on this committee.

Other expenses are about signing with the new bank. The first cost is the Notarial, which will be around $600 (depending on the loan amount). Another expense is the home appraisal that will 300-400 euros, to which the costs of agency (about $300) and registration in the Land Registry (about 100 euros) are added. Total costs are about $1,300, but it depends on the amount of the mortgage.

If we get that the act at the notary is processed, as indicated by the Law as a document without amount of the price it is $30.05 and the cost of registration is only $13.36. If in addition, we negotiated a commission of 0% in mortgage subrogation change can be very cheap.

What should I?

Obviously, there is no better or worse option as they are different alternatives. In the first instance, we were interested in reaching an agreement with the bank to improve conditions, but if this is not possible, it is reasonable to use surrogacy and change our mortgage bank. Anyway, we should not forget that both the subrogation and the novation may incur costs if our entity applies some sort of commission if either of these two options is executed.

In any case, the current mortgage and real estate situation in US, where low interest rates and dynamics of the property market is a fact, favors debtors, who can negotiate your mortgage in a much more attractive terms, not just as the interest rate, but also on the repayment period and the commissions that an entity applies to us.

Making your irrefutable lease

  1. Follow your state laws. The relevant rights owner and tenant laws vary between states. It is very important that you understand these laws jurisdiction when you write a lease. If you end up writing something that is enforceable, your lease may become unusable for you. Start with a standard lease, but make sure it contains the right conditions.
  2. Have a lawyer review the lease Get legal advice for two reasons: to make sure your lease adheres to local laws and to make sure you give adequate protection if problems arise. Find an attorney who has considerable experience developing and approving leases and other contracts. He or she will know the right language to be used and the right conditions to be included to make sure your lease is legally irrefutable.
  3. Make sure the language is clear. A lease should not be difficult to understand for any party. Do not use a lot of legalities. Write clear, concise sentences. Do your best to ensure that no confusion will arise as a result of a confused lease.
    1. Check the spelling and grammar. A lease with poor grammar, poor punctuation and misspelled words can be confusing to read.
    2. Use special formatting to highlight important information. You can put in bold the amount of rent and the deposit amount and highlight important dates.


  • Always make a legal professional check your lease to verify implementation capacity in the event of default.
  • Always check your local laws before executing the lease. When you write a lease, it is important to make sure that does not violate local law contracts.

How to write a lease

Looking to rent a property for the first time? Signing a lease with your tenant will help ensure that the process does not have a hard and give you legal recourse if there were any. A lease must be written in clear and straightforward language and should include payment terms, rules that the tenant must follow and the details of what will happen if either party breaks the agreement. Start with a standard lease and then alter it to fit your individual needs and adhere to the laws in your jurisdiction. Read on to learn more about writing a lease.

  1. Give it a title to the lease. At the beginning of the paper, write “Residential Lease” or other appropriate title to make clear that it is a legal contract.
  2. Identify all parties to the lease. Clearly lists the name and address of the owner and the name and address of the tenant, making it clear who is the lessee and who is the lessor. If you want you can include additional contact information such as phone numbers and email addresses.
  3. Describe the asset you are going to cover the lease. If you write a residential lease, type the full address and apartment number of the rental property. Describe the condition of the property and the date of the lease.
  4. Sets the duration of the lease. You must have start and end as well as the specific length of time the lease in days, weeks or months. If there is any scheduled interruption in the continuity of use or if there is an option for early termination of the lease, it must be specified.
    • Most leases last for three months, six months or a year.
    • You also have the option of issuing a monthly or weekly lease.
  5. Considers all capital associated with the lease. For a rental of property, payment information must include the amount of rent and the stipulations regarding how to pay.
    • Write what day of the month in which income and is due to be sent. .
    • Specifies whether a late fee will apply after a certain amount of time and soon will be. For example, you can write, “If the tenant pays more than 10 days after the due date, the tenant will have a surcharge of $ 60.00 for late payment.”
    • Describe the terms of the deposit. It indicates the amount of the deposit and the terms under which it will be returned. It notes that the deposit will not be refunded unless the property is in good condition at the end of the lease indicates how many days after termination of the lease will be returned.
  6. Assigned responsibilities. Indicate who will be responsible to pay for services (gas, water and electricity), responsible for waste and recycling, servicing the external areas of the property and any other specific responsibility for the rental property.
    • Check local laws to find out how to analyze the responsibilities. In some cases the owner will be legally obligated to pay the gas and water, while in other areas the tenant should be responsible for these expenses.
    • Indicates who is responsible for making repairs, maintain the equipment in operation and so on. Again, you should check your local laws to determine what should be your role. In most cases the owner is responsible for the living space remains safe and functional.
    • It indicates that the tenant is responsible for informing the owner about the problems with the rented property, including safety concerns, lost keys, etc.
  7. Describe the specific obligations of the tenant under the lease. This should provide that the tenant is responsible to adhere to all applicable laws; the tenant agrees to use the property only for its intended use and that the tenant is responsible for any violation or fines received by fail in their duties.
    • It states that the rental place should be used for residential purposes only.
    • Write what to do if the tenant damages something inside the property.
    • Specifies whether the tenant is allowed to make changes to the property. For example, if the tenant wants to paint the walls, install a modem and so on, you must set in the lease if these changes are allowed.
    • Decide if pets are allowed and specify the rules regarding these in the lease. You may need an additional non-refundable deposit for each animal pet Based on weight. You can indicate whether pets are allowed inside the house or whether they should be left out. You can specify the actions you will take if pets are not treated humanely. Carefully considers all aspects of allowing pets in your home.
    • It determines if the tenant is allowed to sublet the unit and describes the process for doing so.
  8. Specify the consequences of missing payments or violate the terms of the lease. You must detail the actions the owner if the tenant fails to make the agreed payments or if found violating other assigned duties. Detailing the resources available to you as an owner, including eviction, seizure and / or legal action.
  9. Includes space for both parties sign and date the lease. The landlord and tenant must sign the lease for the contract takes effect.


How to get out of a lease with legal reasons

  1. Claims uninhabitable. This can be something as simple as the pool it is not available (when the contract states that you are entitled to it)! You are not obliged to stay in a situation that is dangerous or can only counteract what you guaranteed to start.
    • For problems inside your apartment. Are there any sharp or exposed edge? Do the pests return? Are there dangerous fumes into the air by sewage leaks? Does the heater is broken? You cannot cause these problems, but keep an eye on the conditions of your home that are lower than what you’re paying for quality.
    • Troublemaker out of your apartment. Do the doors are broken and are unsafe? Is not nothing like the model you were taught? Is the parking is neglected? If so, you can claim you were deceived or feel insecure with the current circumstances.
    • Give opportunities to your landlord to fix the problems. Unfortunately, you cannot leave your place of residence and then indicate problems. However, if you do not fix “within a reasonable time” you have a just cause to terminate your lease. Notify him or her by registered mail and in person, especially if you expect legal complications.
  2. Cites a legal unit. This requires a bit of research, but is more common than you think. Inquires as to government regulations and history of the building in which you live.
    • If a garage or other section was converted into a housing area that might be illegal. Investigates the appropriate permits and zoning violations.
    • If the building has a foreclosure or are changing owners, these circumstances make you a legal termination.
  3. Research your landlord. Many apartment managers and housing have to take his word. If they are not who they claim to be, this is an automatic timeout.
    • Your landlord may be an administrator of unauthorized property or a tenant who is subletting his apartment without notifying the owner. Or it could be a much bigger issue if the intermediary company that you work there legally.
  4. Use the unfortunate circumstances to your advantage. If a situation that is beyond your control arises, you can use to end your lease legally. Some valid reasons are:
    • Being called to military service
    • Domestic violence in the place of residence
    • serious injuries and hospitalization
    • Declare bankruptcy

How to get out of a lease with gaps in the contract

  1. Looking for a buyout. Some contracts have a clause that ends your obligations early. Read your contract carefully to see what options you have. If you cannot find your contract, most states require the landlord to provide a copy if requested.
    • A clause is a section of your contract stating that a certain amount of money and with adequate notice may terminate your contract legally. It is often only a portion equivalent to the accumulated income.
  2. Search ambiguities. If something is not clear or is marked twice, bingo on your lease. Read and re-read your contract to find the slightest instance of something that is not clear.
    • Some landlords will give you a document that looks like a lease but is actually a monthly lease.
      • The agreement says that the security deposit is not refundable unless you stay for X amount of months. This means that the document is a monthly lease with an illegal provision of deposit (can never be non-refundable).
      • If you indicate that your free month of rent is payable unless you stay for X amount of months. This is also a monthly lease with an illegal attempt to give back to the laws of non-refundable deposits.
      • Unless the agreement indicates an external date that ends or otherwise defined the end of the lease over a period of time, like a year, you probably have a monthly lease.
    • If the contract is your original work on an extension now, you probably have a monthly lease.
    • Search check boxes are checked twice and illegible sections (in both sets of documents).
  3. Take advantage of the civil codes. If you make a list of reasonable demands are not met your landlord, you are absolutely right to legally renounce the premises.
    • Write a letter (be sure to keep a copy) stating your demands in a reasonable and thoughtful manner. This is especially for a judge to see it later.
    • If your landlord makes little or no effort to meet your demands, you can bring him to court. He is not fulfilling its part of the contract. Take every week to fulfill the request is not enough; their responsibility should be punctual and organized.
    • Every state in the US varies, you should check to see what landlords must offer in your state.



How long to pay it? What is the type of rate that suits me? We tell you what they are questions to ask to get a mortgage.

The first and most important is … Can I afford a mortgage?

Everything must start with this question. Mortgage payments may increase and exceed the amount of a regular income, so the economic solvency is essential when purchasing a financial commitment of this kind.

As a rule, the total share of the mortgage must not exceed twice the amount of your annual income.

Do I have information from different financial institutions?

Different banks offer different options. Be sure to be well informed and select the financial institution whose characteristics and payment plan to accommodate your chances. You’ll have to do good research!

Will I pay the mortgage alone or divide the costs with another family member?

This is one of the basic questions you should ask yourself to get a mortgage. You can be solely responsible or pay the mortgage with contributions from other family members, in which case taking into account the income of all to establish the maximum quota of debt.

Is the fixed rate will choose variable or mixed?

The interest rate can be fixed, variable or mixed. When fixed, the amount of interest payable is set and does not change until the end, which can work when interest rates are low and are expected to rise.

On the other hand, if rates are high and are expected to fall in the future, it would be best to choose a variable rate, which means that fluctuates according to certain established parameters. Mixed rates are those that remain fixed for a period and then begin to vary.

How long the mortgage term be?

One of the things you have to know to ask for a mortgage is the amount of time you are willing to cover payments of it. Remember, the longer the term, the higher the total cost of the mortgage because of interest.

Am I taking into account the change in my income?

You do not always going to win the same! Before ordering a mortgage you have to ask what your labor and financial expectations for the coming years. Even if you think the outlook is optimistic, taking into account as unforeseen financial crises, unemployment or inflation. A contingency plan never enough.

Did I read every last clause in the contract?

The famous fine print may contain requirements or provisions that are unwilling to comply. Make a thorough review of the contract and check that no such clauses. Agreeing with the responsibilities and obligations that are acquired or is not one of the things you have to know to ask the mortgage.

Now that you know what they are questions to ask to get a mortgage, is just beginning the process of investigating the different plans and undertake the adventure of buying a property.