MCP Help Blog

Okay, you know you’re in trouble–too much personal debt and a mortgage you can’t handle. But there’s a tightrope you need to walk in order to score a mortgage modification. You have to have enough income to qualify for a modification–that is, you need to prove that you can successfully make the new payment–but you need to show that you can afford ALL your payments. And if you got too silly with your credit card debt it could cost you your modification approval.

Try calling your credit card companies first. Many have hardship programs that will allow you to get a low rate in exchange for freezing your card and not using it anymore. This is different from closing the account, which by dropping your amount of available credit and increasing your utilization rate can tank your credit rating.

How About Credit Counseling?
Credit counseling can be a very good thing, especially for those who have real difficulty managing finances and paying bills. But most agencies also require that you close out your credit cards–which can hurt your credit rating. If you normally had a good track record with your creditors,  and have financial difficulty due to something out of your control, AND can show that the difficulty is not permanent, you can probably do a DIY payment reduction plan and then apply for a refinance or modification if applicable. See www.makinghoimeaffordable.com. However, iif you need a debt management plan to get your finances in order and the budgeting help you require, a reputable counseling service can make it happen.  Then you too can look into refinancing or modifying your home mortgage.