If you opt for a loan modification plan that rolls your late payments into the principal owed on your home, you may actually see an increase in your credit score. This practice essentially “makes you whole” again with your lender and in the eyes of the credit bureaus.

However, the loan modification plans out there designed to rescue those suffering with negative equity products and mortgages for more than a home is currently worth are unlikely to affect your credit score. If your credit score has suffered due to late payments and you engage in a loan mod of this type, while you may come current with your lender and the credit bureaus, those lates will still show.

If you’re looking into a loan modification program, be sure to ask the right questions. Fees for the loan mod program, how the program will affect your credit, required documentation – all are great questions. Do yourself a favor as well: talk to a couple of different loan modification professionals. Find one that makes you comfortable and has reasonable fees. After all – your mortgage should be the key to your future, not a source of unnecessary stress!

Sincerely,

The Staff at San Juan Realty, Inc.