Financial Hardship Letter Example | Quicken Loans

How To Write A Hardship Letter: 7 Tips

Be mindful of the specific tips and advice below as you work through writing your letter. 

Include accurate contact information

It’s crucial to make sure the contact information you include in your letter is accurate. This better ensures your server will be able to contact you. We recommend doing a read-through of your letter for any errors before sending it to your server.

Be personal, but keep it semi-formal

It’s best to be semi-formal in tone and specific in facts when writing this letter. While you may be feeling some very real emotional distress at the prospect of losing your home, the key here is to prove 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 included above – for guidance, but your letter should be genuine and unique to your circumstances.

Keep the letter short and concise

While it may be tempting to embellish your story or provide a full backstory, be concise, straightforward and honest with your letter. Keep the letter simple and direct with basic language to ensure it’s clear. Ideally, it should be one page (or under 450 words), so don’t go into any unnecessary details.³

State the problem

You’ll need to explain exactly what is causing your delays or inability to make your mortgage payments. Don’t add extra fluff – be straightforward and honest with your answers.

Focus on the most important reason for assistance if there are multiple reasons why you can’t make payments. This will make the biggest difference in helping you get approved for a modification or refinance loan.⁴

Provide enough evidence

It’s important to provide as much factual information as necessary so your lender can get the full picture of your situation. You should include details about your income, assets and expenses.

Your servicer may just need a compilation of these various documents, rather than a hardship letter. It’s best to reach out to your lender beforehand to see which documents and information are necessary to send. If you have a Rocket Account, you can fill out the Application for Success instead.

Commonly requested documents include: 

• Recent pay stubs
• Form 1099s or W-2s
• Current and previous year’s tax returns
• Bank statements
• Medical bills
• Employment termination or relocation letter
• Death certificate
• Divorce or separation agreement paperwork
• Military orders
• Proof of incarceration

Lenders will often request documentation to verify the information in the letter, so it’s important to only include accurate information.¹

Include an action plan

You need to focus on your objectives 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 issues. ³Keep in mind the options available to you will depend on what you are approved for and what your lender thinks you can do.

For mortgage relief, you may receive mortgage forbearance and deferment plans. Forbearance will allow you to temporarily pause your mortgage payments to give you time to catch up on finances. A deferment may be offered as well, which will push the payments you missed during the forbearance period to be due at the end of your loan term.

Below are some common options but they aren’t always guaranteed. Speak with your servicer first to see what options they have available for you.

• Increasing interest rates, but extending the loan term
• Reducing payments
• Lowering the interest rate
• Forgiving late fees

For example, you could ask for your monthly payments to be put on hold for three months or request to speak to them to discuss your options.

Have your letter reviewed before sending

We recommend having your letter reviewed and proofread by a close family member or financial coach before sending it. This will help ensure you’ve included all the necessary details and that it’s free from grammar and spelling errors.

Remember, the letter should be addressed to the lender, and it’s important to include your contact information in case the lender has any questions. Finally, the letter should be signed by you, or the person requesting the hardship arrangement.