Free Hardship Letter for Mortgage Refinance Sample

A hardship letter is a crucial component of the mortgage refinance process. It serves as a personal appeal to your lender, explaining the circumstances that have made it difficult for you to meet your mortgage obligations and why a refinance is necessary. 





Writing an effective hardship letter requires careful thought and attention to detail. In this article, we will provide you with a step-by-step guide to help you craft a compelling hardship letter for mortgage refinance.

Step 1: Understand the Purpose 

Before you begin writing, it’s essential to understand the purpose of your hardship letter. It should convey your financial difficulties, demonstrate your commitment to homeownership, and explain why refinancing your mortgage is the best solution for both you and the lender.

Step 2: Gather Necessary Information 

To write a comprehensive hardship letter, gather all the relevant information about your mortgage, financial situation, and the reasons behind your hardship. This may include:

  1. Loan details: Note down your loan number, mortgage amount, interest rate, and any other pertinent loan information.
  2. Financial documents: Collect copies of recent pay stubs, tax returns, bank statements, and any other relevant financial records to support your claims.
  3. Hardship documentation: If applicable, gather supporting documentation such as medical bills, job termination letters, divorce decrees, or any other evidence that validates your hardship.

Step 3: Use a Professional Tone 

Maintain a professional and respectful tone throughout your letter. Address the recipient formally, using their proper title and full name. Avoid being confrontational or blaming the lender for your situation. 

Instead, focus on explaining the circumstances and expressing your willingness to find a mutually beneficial solution.

Step 4: Begin with a Proper Salutation and Introduction 

Address the letter to the appropriate individual or department at your mortgage lender. Use a formal salutation such as “Dear [Lender’s Name]” or “To Whom It May Concern.” 

In the introduction, briefly explain who you are, your mortgage account number, and your intention to refinance your mortgage due to financial hardship.

Step 5: Provide a Detailed Explanation of Hardship 

In this section, describe the specific financial hardship that has made it challenging for you to meet your mortgage obligations. Be honest and transparent about your circumstances. 

Some common examples of hardships include job loss, medical emergencies, divorce, or a significant reduction in income. Include relevant dates and any supporting documents that illustrate your hardship.

Step 6: Demonstrate Your Efforts to Overcome the Hardship 

Explain the steps you have taken or are currently taking to overcome your financial difficulties. Highlight any actions you have taken to increase your income or reduce expenses. 

This may include obtaining a new job, enrolling in educational programs, or seeking financial counseling. Show your commitment to resolving the situation and reestablishing your financial stability.

Step 7: Present a Proposed Solution 

In this section, outline your proposed solution for refinancing your mortgage. Explain why refinancing is the best option for both you and the lender. 

Highlight the benefits, such as lower monthly payments, extended loan terms, or reduced interest rates. If you have already explored refinance options, mention them briefly.

Step 8: Express Your Commitment to Homeownership 

Convey your commitment to homeownership and your desire to maintain a positive relationship with the lender. Assure them that refinancing will help you regain control of your financial situation and allow you to fulfill your mortgage obligations without further hardship.

Step 9: Provide Contact Information 

Include your full name, current address, phone number, and email address at the end of the letter. Encourage the lender to reach out to you for any further information or clarification they may require.

Step 10: Proofread and Finalize 

Before submitting your hardship letter, review it carefully for any grammatical or spelling errors. Ensure the information is accurate, organized, and clearly presented. 

Consider seeking feedback from a trusted friend or family member to ensure the letter effectively communicates your situation.

Template for a Hardship Letter Due to Unemployment

Hardship Letter for Mortgage Refinance Sample

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Email Address]
[Phone Number]
[Date]

[Recipient’s Name]
[Recipient’s Title]
[Mortgage Lender’s Name]
[Mortgage Lender’s Address]
[City, State, ZIP Code]

Subject: Hardship Letter for Mortgage Refinance

Dear [Recipient’s Name],

I hope this letter finds you well. I am writing to express my sincere desire to refinance my mortgage with [Mortgage Lender’s Name] due to significant financial hardship. 

I am committed to homeownership and believe that refinancing is the best solution to regain control of my financial situation and continue meeting my mortgage obligations.

I am a responsible homeowner and have been faithfully making mortgage payments since I obtained the loan. However, unforeseen circumstances have created a severe financial strain on my ability to meet the current mortgage terms. I would like to provide you with a detailed explanation of the hardships I am currently facing.

[Explain the specific financial hardships you are experiencing, providing relevant dates and supporting documents where applicable. Be honest and transparent about your situation. Examples may include job loss, medical emergencies, divorce, or a significant reduction in income.]

Despite these hardships, I have taken proactive steps to overcome my financial difficulties. I have diligently sought alternative employment and have enrolled in professional development programs to enhance my skills and broaden my job prospects. 

Furthermore, I have sought financial counseling to create a more sustainable budget and reduce unnecessary expenses.

I firmly believe that refinancing my mortgage will enable me to regain financial stability and fulfill my mortgage obligations without further hardship. 

I have researched and explored various refinance options and firmly believe that refinancing with [Mortgage Lender’s Name] is the most suitable choice. 

Lowering my monthly payments, extending the loan term, or reducing the interest rate would greatly alleviate my current financial burden.

I want to emphasize my commitment to homeownership and my desire to maintain a positive relationship with [Mortgage Lender’s Name]. 

Refinancing will provide me with the opportunity to stabilize my finances, avoid any potential default, and continue building equity in my home. 

I value the trust and support of [Mortgage Lender’s Name] and assure you that I will make every effort to meet the refinanced mortgage terms.

Please find enclosed the necessary documentation, including financial statements, pay stubs, tax returns, and any additional supporting documents. I am available to provide any further information or clarification you may require to assess my situation fully.

I kindly request that you review my request for mortgage refinance with compassion and understanding. I genuinely believe that refinancing is the best solution for both parties involved, and I am committed to working closely with [Mortgage Lender’s Name] to ensure a successful resolution.

Thank you for considering my request. I look forward to hearing from you soon. Please do not hesitate to contact me at [Phone Number] or [Email Address] if you have any questions or require additional information.

Yours sincerely,

[Your Name]

Frequently Asked Questions (FAQs)

Q: What is a hardship letter for mortgage refinance? 

Answer: A hardship letter for mortgage refinance is a written document that explains the financial difficulties a borrower is facing and requests a mortgage refinance to alleviate the hardship. 

It outlines the specific hardships, such as job loss, medical emergencies, or reduced income, and demonstrates the borrower’s commitment to homeownership while seeking a mutually beneficial solution with the lender.

Q: Why is a hardship letter necessary for mortgage refinance? 

Answer: A hardship letter is necessary for mortgage refinance because it allows borrowers to provide a detailed account of their financial difficulties and demonstrate their need for assistance. 

It serves as a personal appeal to the lender, helping them understand the borrower’s situation and potentially approve a refinance that can help the borrower regain financial stability and continue meeting their mortgage obligations.

Q: What should be included in a hardship letter for mortgage refinance? 

Answer: A hardship letter for mortgage refinance should include the following:

  1. Explanation of the hardship: Clearly describe the specific financial hardship you are facing, including details such as dates and supporting documentation.

  2. Efforts to overcome the hardship: Highlight the steps you have taken or are taking to overcome your financial difficulties, such as seeking employment, undergoing training, or obtaining financial counseling.

  3. Proposed solution: Outline why refinancing your mortgage is the best solution for both you and the lender, emphasizing the benefits such as lower monthly payments or reduced interest rates.

  4. Commitment to homeownership: Express your commitment to homeownership and assure the lender of your intention to fulfill your mortgage obligations after the refinance.

  5. Contact information: Provide your full name, address, phone number, and email address, making it easy for the lender to contact you for any further information or clarification they may need.

Q: How should a hardship letter for mortgage refinance be formatted? 

Answer: A hardship letter for mortgage refinance should be formatted as a formal business letter. Use a professional tone and maintain a clear and concise writing style. Include a proper salutation, introduction, well-organized paragraphs, and a polite closing. 

Ensure the letter is free from grammatical and spelling errors, and consider using a legible font and appropriate formatting, such as left alignment and adequate spacing.

Q: What supporting documents should accompany a hardship letter for mortgage refinance? 

Answer: Along with your hardship letter, it is recommended to include supporting documents that validate your claims and provide evidence of your financial situation. 

These may include recent pay stubs, tax returns, bank statements, medical bills, job termination letters, divorce decrees, or any other relevant documentation that supports your case. 

Including these documents strengthens the credibility of your hardship letter and reinforces the need for mortgage refinance.

Q: How long should a hardship letter for mortgage refinance be? 

Answer: A hardship letter for mortgage refinance should be concise and to the point. It is generally recommended to keep it to one or two pages. 

Focus on providing a clear explanation of the hardship, outlining your efforts to overcome it, and proposing a solution. Avoid unnecessary details or excessive elaboration that may dilute the impact of your letter.

Q: Should I seek professional help to write a hardship letter for mortgage refinance? 

Answer: While it is not mandatory to seek professional help, some individuals may find it beneficial to consult with a housing counselor, financial advisor, or an attorney experienced in mortgage refinancing. 

These professionals can offer guidance, review your hardship letter, and provide valuable insights to help you present a strong case to your lender. 

However, it is possible to write a compelling hardship letter on your own by following the necessary guidelines and utilizing available resources and templates.