Loan Modification bailout Program – Will a Bailout Program Wreck My Credit Score?
The best way to avoid foreclosure and to keep your home is a modification to your loan. But does a home loan modification affect your credit rating in any way? The affect a loan modification bailout has on your credit rating depends on a few factors:
* Were you on time with your payments before you got a mortgage modification or have you sometimes been late?
* Did you and your lender see eye to eye about reducing the recoverable principle as part of the modification?
It is not the modification, on its own, that will negatively affect your credit rating. Late or missed payments or defaulting on any of the conditions of your first loan will.
A loan modification bailout program sometimes allows the lender to forgive some of the principle that is owed. In this case, it is recorded that you paid less than what you agreed to pay and this will affect your credit rating in a negative way.
often, a homeowner will already have missed some payments before seeking a loan modification. In this case a modification can actually help the borrowers since his contract is now current and the loan is considered current.
There are no set procedures or any precedence set regarding modifications since they are a relatively new choice for homeowners, so credit agencies may deal with them in different ways. One thing you might want to do is come to an agreement with your lender that states your rating will be restored. You can request that the loan be listed as current with all credit bureaus once the loan modification is approved. They do not have to do this but it never hurts to ask.
Getting back on your feet financially after obtaining help from a loan modification bailout program involves restoring your credit rating avoiding foreclosure and getting a new start. Some help and some education will help you learn what to do to save your home.
To be honest if you are at risk of losing your home your credit score should be the last thing on your mind. However if you approach this the right way you can protect your credit score and save your home. If your are facing problems with your home loan click here to get help and save your home now.