Credit Issues and Loan Modification
Written by Tony Garrudo on September 9th, 2009
If you have high mortgage payments and are in the foreclosure process, a loan modification may be a blessing. You may be able to relieve yourself of the misery involved in foreclosure by getting a loan modification.
While trying to achieve a loan modification, you may have credit implications. Not to worry, they can easily be remedied over time.
Higher authorities do not grant loan modification to defaulters, who fail to pay back their loans.
If you have a high credit ranking and your loan goes past 30 days, expect a drop of up to one hundred points on your credit score.
Your credit score will not be affected if you are current while doing a loan modification. However, if you allow your payment to lapse it may drop your credit score. A drop in your credit may reduce your chances of getting better credit offers in the future.
The good news is doing a loan modification will assist you in lowering your overall housing debt.
The objective of a loan modification is to lower your payments to be manageable and slowly put you in a position to increase your credit score by making your payments on time every month. Most loan modifications are fixed for a period of two to five years. This period of time is perfect amounts of time to get you caught up and reestablish your credit at the same time.
A late payment does not have the long term credit implications like a short sale or credit counseling.
Save your home and prevent your credit from being destroyed. Avoid foreclosure and consult with your loan modification representative to help you get qualified for loan modification and discuss the pros and cons. Make sure that you properly research the loan modification company that you plan on working with. Some important documents to gather include, your last two years tax returns, w-2s for the last two years, recent bank statements, last two pay stubs, a hardship letter and a financial statement that lists all of your monthly expenses minus your monthly income.
Modified Mortgage Solutions are experts in loan modification processing, and an authority in loan modification processing questions.Please contact us with any questions www.modifiedmortgagesolutions.com
This entry was posted on Wednesday, September 9th, 2009 at 7:05 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Tags: Finance, loan modification, loan modification processing, loan mods, loans, mortgage, real estate
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