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11-17-2010 01:28 PM
My home equity loan counts as revolving credit. As a result, my utilization rate is high. I have some bad marks on my credit in the past but haven't had any issues for over a year. Looks like I need to somehow convert my home equity loan into a second mortgage or into my first mortage so it will not negatively affect my FICO score. However, now sure if I can do that with today's high standards regarding obtaining mortgage loans. Wondering if I can go to my mortgage company and try and use the Govt Making a Home Affordable Program.
I received a modification a year ago but probably should have negotiated a better deal. They didn't lower my interest rate, just increased my term to 40 years to lower the monthly payment. They also didn't add my equity line of credit into my morgage. Can I get a second modification under better terms to help my FICO score and long-term finances?
11-17-2010 01:50 PM - edited 11-17-2010 01:56 PM
It sounds like, since it is scoring as revolving credit. That it is not really an installment loan, but a home equity line of credit based on your equity in the property, and your installment mortgage loan?
Refrinacing to a new mortgage loan, an thus converting all debt over to a pure mortgage/installment loan, would probably involve a check of the current property value on the home, your current debt on the loan, including your indebtedness under the LOC, your current income, assets, debts, etc.
Such a move, purely for FICO score removal of revolving credit, is not easy to answer.
11-17-2010 02:15 PM
Correct, home equity line of credit is not considered an installment loan.
I have one write off 3 years ago on my credit report and 4 to 5 that I negotiated a settlment after they were considered seriously delinquent but have been paid off. I haven't had anything negative on my report for over a year plus, yet me FICO isn't going up and remains in the fair range. I know the older the delinquencies get the better but it seems the high utilization rate is causing a high debt to income ratio and continues to negatively impact my score.
Didn't know if I had a reasonable shot at getting a home modification, even though I have already had one. Figured I would need to use the govt program to make that happen.
11-17-2010 03:27 PM - edited 11-17-2010 03:32 PM
What were the levels of delinquncy, and date of occurance, of all prior derogs, whether or not the debt has now been paid?
Paying any debt does not remove the delinquencies/derogs previously reported.
They may now be you remaining Achilles heel.
11-18-2010 04:55 AM
Back in 2008 I qualified for the Make Homes Affordable program (Fredi Mac) with National City Mortgage (now PNC). Mt orginal rate was 7.25 and they offer 5.5% and it would have cost my 4500 to refi plus PMI. I went to my local CU and got 4.0 % withunder 1k refi fee and no PMI. In other words they were trying to rip me off, after being a good customer for 5 years.
Try checking with a local CU, you never know and you may get a better rate.
LOL my boss had a jumbo loan with PNC as well and I got him to switch to my local CU. I owuld have loved to let them know if was me who got another mortgage account closed with them.
11-18-2010 10:28 AM
one derog will be one year old this month, the other are two years or older. All have been paid but one. The one that has not been paid is three years old. Figure it wasn't really worth paying that one at this point. I know the derogs can stay on the CR for up to 7 years. Also, they lessen the hit on your FICO score the older they get. Question is, when do they start to lessen the hit on my FICO score and at what pace...