Open Question: Does a loan modification affect one's credit score?

[Administrator]

My 5 yr interest only ARM on my townhouse will adjust in July 2010. I bought it when I was single, working full time as a pediatric RN, and I am only on the title. Now I am married, have 2 kids, and work less than part time only one day a week. I wanted to refinance, bit with the market the way it is, we are upside down, and owe more than the home value. We are afraid that in two years, our payment may be way more than what we can afford. Right now, we have a decent amount of savings. My husband makes good money and fortunately we are able to pay the mortgage and live comfortably. We want to buy a house. We aren't sure to keep the town home because we won't get the value for what we paid for and we won't be able to rent it out for the amount of the mortgage. In fact we would probably pay $400/month out of pocket to cover the expense. My husband thought it might be easy for me to walk away and go into foreclosure so we can just buy another home, but I am afraid what would happen to my excellent credit. So we thought maybe a loan modification might be a solution that way we can take care of a potential problem ahead of time. Has anyone had any problems with this and does anyone know if it will affect my credit?

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[hardikvagadiya@gmail.com]

Loan modification having an affect on your credit rating entirely depends on a few events: Have you been prompt on your payments before you opted for loan modification or have you lagged behind sometimes? Were you and your lender in agreement about reducing the principle recoverable as chunk that is part and parcel of modification contract? It will not trigger a negative remark on your credit. This would be by reasons of unpunctual or missed and not sticking by the conditions of the loan agreement got into initially.

[pwsolutions]

yes.. not much but that affects your credit score a bit.

[hardikvagadiya@gmail.com]

A little but however is affects.....