Communication is everything

​

Put yourself in your lenders shoes for a moment. Your customer has missed one or a number of mortgage payments and you have just received a letter from them – what would you want that letter to say and what style would you expect it to be written in, in a way that would make your life easier? Ultimately lenders do not like “problems” and value simplicity, honesty and transparency above all other things. 

When writing a letter to your lender to attempt a mortgage negotiation, it is best to keep it simple, set out information clearly and stick to short, sharp sentences that are easy to digest. Follow a process in line with the below:
 

• Look at the last mortgage statement or letter you received from your lender to get the correct address and a name of the person or division of people handling your loan. Address your letter to them. Feel free to call the lender in advance to double check this is the correct address if you are still unsure. 

​

• Keep the tone of your letters kind but formal. Famous quotations, philosophy and other opening lines are unsuitable.

​

• Explain in your own words a summary of why you are behind on your mortgage payments and how you would like to make up the payments. Offer to pay back a little extra for a few months if you can find a way to afford it. Describe your plan here, inspired by the points you concluded from your financial self-assessment and your plan about how to settle your debts. Include an optimistic statement about how your financial matters will eventually improve due to your plan, including how you intend to increase your income, reduce your expenses, get government financial assistance or take out another type of loan.

​

• Close on a positive note by mentioning anything positive about your history, such as previous payments you have made on time and if you still have equity in your home, meaning that your home is currently worth more than the amount due on your mortgage. Here you are trying to give your lender a good reason to file your case into the “not urgent” category of the cases they have to deal with. They will appreciate hearing something from you much more than waiting around to see if you care enough to respond to their notices about late payments.

​

If your lender is unhappy with your proposition or unconvinced, continue the dialogue for as long as possible by responding to the concerns they raise in their written responses to you. If matters stall or deteriorate, you will be heading towards a point where your lender will file for a repossession order with the court. If your situation has deteriorated to this point you will have to consider alternative, more urgent options to stop a repossession order. 

​

​