If you’ve been experiencing financial difficulties and have been unable to make your mortgage payments, you only have a few options available to you, especially if you want to stay in your home. One of the most appealing ways to address the problem is to seek a modification of the terms of your loan with your lender. But doing so is not necessarily a slam dunk. While a modification will lower the amount of money that you are required to pay each month, there are some cases where pursuing this step might have a negative impact on your credit rating. Let’s take a look at the positives and negatives of mortgage modifications.

The first thing you need to remember when considering a mortgage modification is that you’re doing so because you can’t make your payments – in fact, in some cases you can’t even think about applying to modify your loan unless your lender sees that you’re having a problem staying current on your obligation to them. In and of itself, that means that your credit rating is being pushed downward, and if you don’t pursue a modification and end up in foreclosure or bankruptcy, your credit is going to suffer much more than it will if you get a modification. In fact, where a foreclosure would hurt your credit for a very long time, engaging in a modification that will lower your payments and allow you to stay current will help to restore your credit faster, and also allow you to keep more money in the bank so that your credit will climb higher.

One of the problems that can come up with a mortgage modification is that if your lender reports your modification the wrong way, it can look as though you’re not paying your loan. This is especially true if you are seeking modification under one of the programs that offer a trial period of modification to see whether the new terms will work for you. When you’re in the trial period and making lower payments, the credit rating organizations don’t know that you’re in the process of a modification: all they see is that you’re not paying the full amount.

These and other complexities are just a few examples of why it is important that anybody seeking a loan modification work with an experienced mortgage modification attorney who can help you navigate the process and make sure that the banks are treating you fairly. For more information and help with your particular situation, contact us today to set up a time to meet and discuss your case.

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