Loan Modification Plan Won't Hurt Your Credit Ratings

One of the most frequent questions homeowners want answered is how does obama loan modification affect your FICO or credit score. As we will try to cover it here, wondering whether or not availing a modification hurts your credit is viewed as an inane question by many. Now we understand it's essential to protect your credit however at the same time, if you can't pay your bills or you're struggling to put food on the table, you require prioritizing and understanding that a loan modification could be your best alternative.

First, if you're previously late on your mortgage, don't spend your time worrying regarding how federal obamas loan modification plan affects your credit score. This is because a late mortgage payment has by now negatively affected your credit score so a loan modification won't be the cause your credit score has gone low. We could even point out the noticeable reason not to concern regarding the credit impact of a loan modification. In case you have missed one or more mortgage payment, you have to spend your time focusing on availing the help so you won't miss payments in the future. A loan modification which reduces your monthly mortgage payment would assist you getting your credit back on track as it would allow you to use the money you save through being able to pay you're your mortgage and you're additional bills in time going forward.

In most cases, a loan modification won't hurt your credit in long term. When it comes to loan modifications and credit, each lender deals as how they report to the credit bureaus in a different way. On the other hand, if you're approved for a loan modification application and you meet the terms of that modification, it won't affect your credit. Many homeowners are getting approval with the Making Home Affordable Plan also known as HAMP or Obama Plan and this plan needs three trial payments prior to your loan is reviewed for an enduring modification. Throughout the trial period, the banks might report your mortgage to the credit bureaus through indicating you're under a modification program, making payments under the Obama's loan modification program or as paying less than approved. Few banks or mortgage lenders won't report your mortgage payment status in any way throughout the modification trial period and as the modification is made stable, they would start reporting your mortgage again just like they did before the modification being approved.