Open Question: How Does a Home Loan Modification affect your credit score?

[Administrator]

I am considering a home loan modification to reduce my interest rate (and thus my payment), but I was told by the mortgage company it has a negative affect on one's credit score, but they couldn't give me details. I don't want to refinance as I probably won't remain in the house long enough to cover the closing costs. My interest rate, while fixed, is high (7.5%). My credit score is good (740) For anyone who has done this or is in the industry; any information is appreciated.

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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.