How to Write a Mortgage Counter Offer Letter (with Sample)

When an individual, bank or other lending institution makes an offer for a loan which may include the whole amount, interest, deposit required and payment schedule is not acceptable to the borrower, he or she can send a counter offer letter.

The counter offer will revise the initial offer making it more appealing to the borrower. Sending a counter offer letter allows the borrower to decline a previous offer while still keeping the negotiations open.

rejecting the initial offer?

When the borrower makes a counter offer, he or she is rejecting the initial offer rendering it void. Since the first offer is void, the person or institution that made the first offer is no longer legally responsible to honor it. 

For example, if a bank offers a buyer a mortgage that requires a 30 percent down payment and a loan for 70 percent of the full amount, the buyer may not be able to make the 30 percent down payment.

Buyer May Counter Offer

In this case, the buyer may counter offer a 20 percent down payment and 80 percent mortgage for the rest of the amount. 

If the bank declines this counter offer, it is not obliged to continue to offer the original offer.

A borrower may send a counter offer letter when he or she is negotiating the first mortgage. 

People may also negotiate their mortgage after some years if their interest payment is too high, or they want to reduce their monthly payments. 

If this is the case, it is recommended for the borrower to learn as much as possible about the going interest rates and mortgage negotiations or to hire a real estate attorney.

According to research, of the people who recently lost their homes to foreclosure, about half never tried to make a counter offer to their lender to save their home. 

There are many options available, if the borrower will discuss the situation with their lender.

If a mortgage holder wants to change the loan modifications of the mortgage, both parties have the right to submit offers and counter offers to the other party. In most cases, a loan modification is requested to lower monthly payments. 

This type of negotiation is considered normal. However, it is not in the best interest of the borrower to have lengthy negotiations, because during these negotiations the borrower must continue to make mortgage payments, or his or her credit score could drop.

If the loan modification is acceptable to the borrower, the changes will be made on the designated date. If the terms of the modification are not acceptable, the borrower may submit a counter offer.

This is when the negotiations may become lengthy because the lender could try to exploit the fact that the borrower must continue making the larger payments during negotiations. 

The lender may be hoping the borrower will not have the patience to wait for a better offer and take the first offer they get.

Mortgage Knowledge

Lenders may also exploit the borrower’s lack of mortgage knowledge. Borrowers may not know a fair and good offer when they get one. Because of this, lenders may continue to give unacceptable offers.

The best way to get a fast and fair mortgage modification is for the borrower to either study mortgage law or get the help of a foreclosure or real estate attorney. 

If the attorney can get a better deal, it will save the borrower money in the long term. When the lender cannot give unfair offers, it will want to close the deal with a fair offer as soon as possible.

Below is a sample of a mortgage counter offer letter. It is written in formal business-letter style and sent by certified mail, so the sender will have proof that the letter was received as well as who received it. If the negotiations are ongoing, the borrower should keep copies of all correspondence.

Sample Mortgage Counter Offer Letter

Borrower’s Name
Borrower’s Address
City, State, Zip Code


Lender’s Name
Lender’s Bank or Lending Institution’s Name
Lender’s Address
City, State, Zip Code

RE: Counter offer for mortgage loan

Dear Lender’s Name:

This letter is a formal counter offer to the mortgage terms and conditions you sent me on DATE. 

I intend to make my mortgage payments on time, but I require lower monthly payments as my monthly income has reduced because my wife lost her job.

The counter offer I am suggesting is DOWN PAYMENT AMOUNT and AMOUNT FOR LOAN. I believe this is fair for both of us. 

I understand that if you do not agree with this counter offer, your first offer may no longer be available.

Thank you for your consideration in this matter. I look forward to a favorable reply from you. If you have any questions, I can be reached at Email Address or Phone Number.


Signature of Borrower
Printed Name of Borrower

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