Question by vtl: How do I lower the interest rate on my mortgage without having to refinance? Do I have to be in default? ?
Would it be better to stop making the payments to get a lender to actually work with me?
Best answer:
Answer by CARINA G
Yes, you must be in default. Lenders claim that in order for them to review your case, you need to be late, therefore, you have to stop paying. Just when they realize about that, then they will notify you by letter or may be by a call that they would negotiate with you.
Don’t take it for granted that they will low the interest rate. There are some factors which make them to decide whether they will do it or not. If your property has gained equity, then they will tell you to refinance, but think that refinance imply closing costs.
If you don’t have equity, then they will negotiate with you on a modification of the loan. Be aware that they will ask you a lot of questions about your budget. It is important for them to know what your real situation is. If you really cannot afford your mortgage payments, make sure to demonstrate it. Lenders don’t want to negotiate with people who have been paying but want to take advantage of the economical situation.
Always keep in mind that if you miss a payment, your credit score gets affected. Think about that before taking any decision.
Before defaulting and ruining your credit, just call your current lender, let them know you will be shopping around for a lower rate and what are they offering. Many lenders, just to keep your business are lowering the rate by 2 points with no closing fees.