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Homeowners go through the process of a loan modification to stay afloat in times that their mortgage payments are becoming too difficult to maintain. It is possible to refinance the loan again in the future, but do not expect it to come without challenges.
Conventional mortgage loan guidelines require that when trying to finance a new property you will need to have 12 months of payment history on the modification. So if you got a modification 12 months ago and have stayed current with every payment you are okay to apply for a loan on a new home.
When you take a loan modification, you change the terms of your loan directly through your lender. Most lenders agree to modifications only if you're at immediate risk of foreclosure. A loan modification can also help you change the terms of your loan if your home loan is underwater.
If you've been denied a loan modification for illegal reasons, you have rights. A foreclosure by a bank after a wrongful denial of a loan modification can lead to a counterclaim lawsuit against the bank.
Either way, it stays on your report for seven years.
Yes, it is possible to get a second loan modification though statistically it's obvious that you are less likely to get a second modification if you've had a first, and a third if you were lucky enough to get a second.
If your modification is temporary, you'll likely need to return to the original terms of your mortgage and repay the amount that was deferred before you can qualify for a new purchase or refinance loan.
There is a 12-24 month waiting period before you can refinance under most post-loan modification options. To refinance a loan's interest rate and repayment terms, the refinance lender requires you to have stable income and total monthly expenses within 40 percent of your gross monthly income.
Technically, a loan modification should not have any negative impact on your credit score.If that's the case, those the Consumer Data Industry Association missed or partial payments will damage your credit, but the loan modification itself will not.