You know those pesky debt collector calls? The bills and warning letters from your home lender every time you go to the mailbox? Well of course you do. The constant stress of being unable to make timely house payments is forcing you to consider foreclosure or personal bankruptcy. Either can be appropriate responses at times, but there's another move you should consider first: a loan modification.
Is that a perfect solution? Of course not. Your credit report will take a hit, but it could be worse. You can get the full story by seeking out the advice of an attorney with loan modifications Las Vegas NV experience. But here are a few highlights of how a loan modification will affect your credit scores.
A BASIC DEFINITION OF LOAN MODIFICATION
Loan modification is simply a matter of approaching your home lender and looking for a little help. Perhaps a short-term reduction of interest rate or monthly payment. A chance to catch up. Foreclosure is such a long and legally involved process that many lenders would rather work something out with an earnest homeowner if at all possible.
What It's Not
A loan modification is not the same as a mortgage refinance. With a refi, you're simply replacing your existing contract with a new mortgage — one that's typically better for you in the interest rate or other terms. With a modification, you're requesting short- or longer-term changes to your existing agreement because you need the financial relief.
Credit Score Hit
While a refi will have little or no negative impact on your credit scores, the same can't be said of a modification. But the credit report agencies don't consider a modification to be nearly as bad as a foreclosure or bankruptcy. And it's likely that you're only considering a loan modification because you've already gone through a few or several months of late or missed payments. In other words, your credit reports are already showing the damage, with no end in sight. So what do you have to lose?
Not to mention that little matter of no longer having a roof over your head if bankruptcy proceedings don't go your way. With a successful modification, you'll keep your home.
An experienced bankruptcy Las Vegas attorney can negotiate with your lender on your behalf. Perhaps see if you can get a trial modification — short-term relief. This is likely to have less of an impact on your credit scores than a longer-term change. It's even possible to ask that the lender not report your modification to the credit agencies at all.
But that first critical step is to ask an experienced attorney for help. Contact Vohwinkel & Associates today. Call us at 702-838-7522.