How to Cancel Your Mortgage
- 1). Call your mortgage lender or bank and explain that you've suffered a financial hardship that has made it impossible to keep up with your mortgage payments. Tell your lender if you've recently been laid off from your job, seen your annual income plummet or been diagnosed with an injury or illness that is keeping you from earning an income. Ask to have your current loan canceled and modified into one with lower monthly payments.
- 2). Copy the papers that your lender needs to verify your monthly income and debt obligations. These include your current mortgage statement, most recent federal income tax return, last two months worth of paychecks, credit card statements, savings and checking account statements and other loan statements.
- 3). Compose a financial hardship letter that puts into writing the reason why you can no longer afford to pay your mortgage bill each month. Also ask your lender or bank to cancel your mortgage loan and modify it into one that comes with lower monthly payments that you can afford.
- 4). Mail, fax or email your hardship letter and the papers that you made copies of in Step 2. Your lender will use these to determine if you truly can't afford your current mortgage loan payments.
- 5). Agree on a loan modification if your lender approves your request to cancel your current mortgage. You and your lender might agree to have the lender adjust the principal balance of your loan, lengthen the terms of your loan, provide you with a three- to eight-month penalty-free vacation from making payments or reduce your loan's interest rate. All can lower your monthly payment so that you no longer have to worry about defaulting on your loan.
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