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Can I Get a Mortgage Modification Even if I Have a Low Credit Score?



If you have bad credit, you may be wondering if you can qualify for a loan modification. And that's a good question. The answer is: It depends.

Obtaining a Loan Modification with Bad Credit

You may be eligible for a loan modification if:

  • A financial hardship has made it difficult for you to make your mortgage payments in full each month
  • You're locked into a loan with a high interest rate and have been unable to refinance your loan
  • Your home is worth less than the balance of your loan (known as being "under water")

In many instances, the eligibility criteria for loan modification programs allow homeowners with low credit scores to participate. For example, the FHA Refinancing for Underwater Homes requires only a FICO score of 500. (FICO scores range from 300 to 850, with anything from 300 to 640 considered bad credit.)

In deciding whether to modify your mortgage, your lender may try to determine why you have a bad credit score. If, for example, you've missed mortgage payments or been late with your payments, that will hurt your credit score. But if you have a bad credit score because you have a lot of debt (not just your mortgage) and you are delinquent on many of those accounts, then your lender may deny your application. In that case, the mortgage company may conclude that a mortgage modification won't help because you're unable to make most of your debt payments.

A loan modification lawyer can help you determine whether you'll qualify for a mortgage modification.

Visit LawyerLocator to learn more about loan modification law or to locate a loan modification attorney in your area.