How Does a Home Loan Modification affect your credit score?

It won't hurt your credit score because you are not actually borrowing any money, you are just refinancing. In some cases it may actually help you credit score. Example your first loan was for 200K, you've paid off 50K, your new loan will be for 150K, that means your loan amount is smaller, and better for your credit. Also it will show on yor credit score that you paid off a loan. I just refinanced with a no closing cost loan( you pay a higher APR, but you will not pay any closing cost. ) I am paying 6 1/4, it's probably even lower now. The fed is supposed to lower it again, so I would wait a month or so to see what happens,

The answer is yes, it does. We are at the end of 4 year payments for our modified loan in 2011. The person who s name is listed first on the loan (if it s a joint loan; e.g. husband and wife) gets hit the hardest. So, my credit score went down, but my husband s wasn t affected that much. Mine is back in the high 700 s now with 4 years of regular payments. I think it starts to get better after a year of payments, but even now I am still given a lower credit line for new credit cards than my husband. We have applied several times in the last few years for cards with airline bonus miles.

It never looks good to have a lot of outstanding debt on facilities, especially new ones, and for high amounts.

Going over a credit bureau and seeing a recently opened 50K Loan (most renovation budgets are around that area) opened 2 months ago that clients have just started paying down ... is just one extra obligation.

Now if everything else is in line like your debt servicing ratio - so you can afford it - then it really doesn't matter. Even better with good repay history.

I used to underwrite loans for a bank who modified loans under their own portfolio. The short answer is of course it will effect her credit. Regardless if she was current & paying on time prior to the modification, when you modify your changing the original agreed upon Note & agreement that she signed. BUUUUUT it depends on what type of mod she get's. If it only effects the term, where they extend the term out then the bank & investor is still getting the rate charged & the only thing making the payment smaller is the term being extended. But if the bank has to decrease the rate or forgive principal then bank & investor are both losing out big time & of course they're not going to let that go without some consequence.

depends on who your getting it with it could bring your credit score down.