Will my Credit Be Affected by Trial Loan Modification Period

Will my credit be affected during my 3 month trial period for HAMP? My mortgage company just
approved me verbally over the phone for a 3 month trial period (after initially denying due to
my income). The trial period payment is only about $32.00 less than my current payment. I was
wondering if it would be advisable to even do the trial period or should I cancel the whole
thing because I'm afraid of taking a hit on my credit?

I was very happy to hear I was approved for the trial period, but disappointed that they are
reducing it so little. Not sure what to do...


Mortgage Loan Modification Answer:

The answer is yes, your credit will be affected negatively if you start paying the trial payments offered during the 3-month trial period. It'll basically show up as "partial" payments on your credit, for which you will be dinged.

You can avoid the hit on your credit report by paying the pre-trial payments since it's only $32 more than the proposed trial payments so you can keep your credit intact. Then see if your permanent loan modification will have a significant reduction instead of only $32.

By the way, the true savings calculation is by comparing your old payments including property taxes and insurance against your trial modification payments, also including the property taxes and insurance.

All the best to you.

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