How to write a hardship letter: 7 tips
Consider the specific tips and tricks below when writing your letter.
Include exact contact details
It is crucial to ensure that the contact details you include in your letter are accurate. This ensures that your server will be able to contact you. We recommend that you read your letter carefully for any errors before sending it to your server.
Be personal, but stay semi-formal
It is best to be semi-formal in tone and specific in fact when writing this letter. Although you may feel real emotional distress at the thought of losing your home, the key here is to prove that you qualify for a financial hardship exemption.2
Remember to be original with your letter. You can use templates and examples – like the one we’ve included above – to guide you, but your letter should be authentic and unique to your situation.
Keep the letter short and concise
Although it may be tempting to embellish your story or provide a full backstory, be concise, direct and honest with your letter. Keep the letter simple and direct with basic language to ensure it is clear. Ideally it should be one page (or less than 450 words)so don’t go into unnecessary details.3
Indicate the problem
You will need to explain exactly what is causing your delays or inability to make your mortgage payments. Don’t add extra fluff – be direct and honest with your answers.
Focus on the most important reason for help if there are multiple reasons why you can’t make payments. This will make the biggest difference in helping you get approved for a loan modification or refinance.4
Provide enough evidence
It’s important to provide as much factual information as needed so your lender can get a complete picture of your situation. You must include details of your income, assets and expenses.
Your repairer may simply need a compilation of these various documents, rather than a hardship letter. It is best to contact your lender beforehand to see what documents and information are needed to be sent. If you have a Rocket account, you can complete the achievement request instead.
Commonly requested documents include:
- Recent payslips
- Form 1099s or W-2s
- Income tax returns for the current year and the previous year
- Bank statements
- Medical bills
- Termination or moving letter
- Death certificate
- Divorce or separation agreement documents
- Military orders
- Evidence of incarceration
Lenders often ask for documents to verify the information in the letter, so it is important to include only accurate information.1
Include an action plan
You need to focus on your goals and make it clear to your creditor that you have a plan they can help you with. Tell the creditor what you need help with and how to facilitate a solution to your financial problems. 3Keep in mind that your options will depend on what you are approved for and what your lender thinks you can do.
For mortgage relief, you could receive forbearance and postponement of mortgage plans. Forbearance will allow you to temporarily suspend your mortgage payments to give you time to catch up financially. A deferral may also be offered, which will cause payments you missed during the forbearance period to be due at the end of your loan term.
Below are some common options, but they are not always guaranteed. Speak with your repairer first to see what options they have available to you.
- Raise interest rates, but lengthen the term of the loan
- Reduce payments
- Lower the interest rate
- Forgive late fees
For example, you can request that your monthly payments be suspended for three months or ask to speak to them to discuss your options.
Have your letter proofread before sending it.
We recommend that you have your letter edited and proofread by a close family member or financial coach before sending it. This will help you make sure you have include all necessary details and that it is free of grammatical and spelling errors.
Remember that the letter should be addressed to the lender and it is important to include your contact information in case the lender has questions. Finally, the letter must be signed by you, or by the person requesting the hardship settlement.