There are many people that contacted their lender to see if they could lower their payment on their current mortgage. Some of those refinanced their existing loans, others did a loan modification. A loan modification may affect your ability to get a new home loan.
Lenders will look at your credit report and see how your current lender is reporting your mortgage. If it shows a modification or paying under partial agreement, the underwriters will go over your mortgage history. If you show a history of late payments or other issues, they may consider the loan modification a "pre-foreclosure". This may mean you need to wait longer before you can buy a new home. It is similar to a short sale as you are not paying your mortgage as the original note stated.
You may need to wait up to 3 years after a loan modification – in some cases it may be as little as a one year wait. You will need to show the underwriter the documentation on the modification.
If you have a modification, talk to a loan officer and see what you need to do for a mortgage approval. That way, when you are ready to buy, there won't be an issue! If you are thinking about a modification, talk to a loan officer and see if there is any way you can refinance instead of doing a modification!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants – Email – Website
