Information on Mortgage Modification and Credit Impact

Bills.com > Mortgage > Mortgages in Trouble > Ask Bill Mortgage Trouble > Information on Mortgage Modification and Credit Impact
READER QUESTION

How will a mortgage modification impact my credit?

Read full question
Bills.com Resident Expert
Dec 12, 2011
BILL'S ANSWER

Thanks for your question. The potential credit impact, if any, depends on whether the reduction is temporary or permanent, is made by reducing interest or principle, and other factors. That said, if modifying enables you to continue your perfect payment record (and your house!), then mortgage modification will be a much better option for maintaining your credit compared to the credit damage caused by missed payments and foreclosure. Just be sure to read and understand your new terms so you're not surprised by hidden fees, penalties, balloon payments, or other things down the road. After all, you don't want to be just "jumping out of the frying pan and into the fire."

I also encourage you to check out the options that will be available come March 4th through the government's new "Homeowner Affordability and Stability Plan." The offer you have been given may be the best one possible for your situation, but it won't hurt to read about the major changes being introduced March 4th by this plan. Generally speaking, it will increase the options for many distressed homeowners. I can't say whether any of them will beat what your mortgage provider has offered, but at the very least, it should help you better understand some of the major changes happening regarding mortgage restructuring.

Free official summaries, fact sheets, and other publications and resources regarding the "Homeowner Affordability and Stability Plan" are available for free viewing and downloading at: financialstability.gov.

For Q&A regarding many commonly asked questions regarding the "Homeowner Affordability and Stability Plan", please see here: whitehouse.gov.

I wish you continued success with your perfect payment history and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.bills.com/

Comments (2)


Avatar
Bills.com
May 18, 2009
Ideally, you should not miss any payments at all, it is a myth that you have to be behind on your mortgage in order to get help with a modification, not true. Try and get cought up with your payments, your lender knows that you are having a tough time, and one missed payment should not hurt. In any case, keep in constant touch with your lender.
Avatar
Daniel .
May 17, 2009
I just miss last month morgage payment for modification , i want to get help from lender without getting hurt my credit? How should should i do? The proceses take a time. Shouldn't i miss no payment at all?
Thanks for your feedback!

What Can I Save?

 
  • Articles
  • Ask Bill
  • Deed In Lieu Of Foreclosure vs. Short Sale

    What are the pros and cons of accepting a deed in lieu of foreclosure in comparison to a short sale?

  • Voluntary Repossession

    What is the difference between a voluntary repossession and one where the vehicle is snatched by a repo man?

  • National City Mortgage

    National City Mortgage is one of the nation\'s largest financial holding companies. They offer a full line of mortgage products, including refinance, purchase loans, debt consolidation and all mortgage products.

  • 401K Hardship Withdrawal

    Are there any specific reasons one has to have for 401(k) withdrawal without penalty?

  • Freedom Debt Relief Information

    Is Freedom Debt Relief a good option for debt relief? Can you do a review of Freedom Debt Relief for me for my debt troubles?

  • Hardship based loans

    Need to apply for a personal loan due to financial hardship? Bills has advice on hardship loans to help you solve your money headaches.

  • 401K Cash Out Penalties

    I cashed out my 401(k) and they took 60% and told me the rest had to go back to the employer. This doesn't sound right to me.

  • No Cost Mortgage Refinancing Explained

    No Cost Mortgage Refinancing Tips and Advice So That You Can Get the Best Refinance Loan.

  • Important Mortgage Loan Terms

    Mortgage loan terms can quickly become confusing. Having a better understanding of the language and terminology involved with a mortgage loan will ease the entire process.

  • Wells Fargo Home Mortgage

    Wells Fargo Home Mortgage makes home-financing easy.

  • Buy a Home with an FHA loan

    Learn How An FHA-Insured Loan Can Benefit You, When You Are Looking to Buy a Home.

  • Bank of America Refinance

    Should I refinance my home with Bank of America?

  • Debt Consolidation

    Debt Consolidation and How to Consolidate Debt - Tips and Advice to Help You Make a Wise Decision.

  • Refinance My Home

    "Help Me Refinance My Home" -- What you need to know.

  • US Bank No Closing Cost Refinance

    Can I get a no closing cost refinance with US Bank if I'm a customer?

  • Debt Relief

    Debt Relief Options | Learn about and compare all debt relief options, including: Debt Consolidation, Credit Counseling, Debt Settlement and Debt Relief Consolidation Loans - Compare All of Your Debt Relief Options for free at Bills.com.

  • Fifth Third Bank Mortgage

    At Fifth Third, we work hard to be a successful, principled, involved financial institution that serves its customers and community. Since its beginning, Fifth Third has provided superior customer service and followed sound banking principles.

  • Washington Mutual

    Washington Mutual offers mortgage loans across the western United States. See how they are rated by Bills.com and by their own users.

  • Government Debt Relief

    What you need to know about Government Debt Relief and Grants.

  • US Bank Home Mortgage

    US Bank Mortgage is home of the Five Star Service Guarantee. See what Bills.com rated US Bank Mortgage, and add your own personal feedback and rating.

  • HSBC Mortgage

    HSBC Bank USA Inc. is one of the nation\'s 10 largest banks. HSBC Mortgage offers a full suite of mortgage and refinance loan products. Read what our users have said and how they rated HSBC Mortgage.

  • Bank of America Mortgage

    As one of the nation's mortgage leaders, Bank of America Mortgage maintains strong client relationships with responsiveness, innovation, and market knowledge. Bank of America offers a variety of loan products, including home purchase and refinance loans.

  • Debt to Income Ratio

    What is the maximum debt to income ratio one can have when getting a loan.

  • Credit Counseling

    Learn the Pros and Cons of Credit Counseling Services, and How to Make Credit Counseling Work For You.

  • Chase Mortgage

    Chase Mortgage is committed to building vibrant communities, preserving our environment and promoting an inclusive culture that benefits our shareholders, customers, employees, neighbors and future generations.

Thank you for subscribing!