Posted on: 21st Jan, 2010 07:49 pm
first time poster here. my spouse and i bought a house about a year ago and six months later, i lost my job. we are still current on our payments. i called our bank to see if we qualify for a modification or a reduction in interest rate. they said we first have to go through a trial period where we will be reported as delinquent for three months and only after that will the change be permanent. My question is about how my credit score will be effected and if so, by how much. And if there's anything else i should know about this program before we go into it. (we don't have an fha loan. our bank has a program mirroring the fha program)
Hi Guest,
If you are in a modification plan, your credit scores will be affected negatively to a certain extent. This is because you are not making the full mortgage payments as was agreed in the loan agreement. The modification plan will reduce your monthly payments. So, you will be making a partial payment towards the loan.
The loan modification will be reported to the credit bureaus as "partial payment plan". This will not ruin your credit scores as missed payments, foreclosures, short sales, etc. will do. But your credit scores will go down to some extent due to the partial payments you will be making under the modification plan. How much the scores will be affected depends on your particular situation.
If you are in a modification plan, your credit scores will be affected negatively to a certain extent. This is because you are not making the full mortgage payments as was agreed in the loan agreement. The modification plan will reduce your monthly payments. So, you will be making a partial payment towards the loan.
The loan modification will be reported to the credit bureaus as "partial payment plan". This will not ruin your credit scores as missed payments, foreclosures, short sales, etc. will do. But your credit scores will go down to some extent due to the partial payments you will be making under the modification plan. How much the scores will be affected depends on your particular situation.
Thanks, Jenkin7.