Waiting Period After Loan Modification To Qualify For FHA Loan


What Is The Waiting Period After Loan Modification To Be Able To Qualify For FHA Loan

This BLOG On What Is The Waiting Period After Loan Modification To Qualify For FHA Loan Was Written By Gustan Cho NMLS 873293

A home loan modification is when a mortgage lender will agree to change the terms of the original mortgage loan in order to lower you monthly mortgage payment.  Reasons why lenders offer modifications is because borrowers are not able to afford their current housing payment due to a change in their income or due to borrowers falling so far behind on their mortgage payments that they need the help of the lender for a workout. Lenders offer to modify a homeowners original mortgage because they do not want the property and avoid foreclosure. There are various different types of restructuring plans.

The terms can be the following:

  • It can be forgiving the amount owed.
  • It can be adding the amount the borrower is behind on to the balance of the loan.
  • It can be discounting the mortgage loan balance.
  • It can be extending the term of the mortgage loan term.
  • It can be reducing the original mortgage rate to reduce the monthly mortgage payment in order to avoid foreclosure.

Is There A Waiting Period After Modification?

Many folks wonder if there is a Waiting Period After Loan Modification:

  • There are mandatory waiting periods after a bankruptcy.
  • There are waiting period after foreclosure to qualify for a mortgage.
  • There is a waiting period to qualify for a mortgage after a deed in lieu of foreclosure.
  • There are also waiting period to qualify for a mortgage after short sale. 
  • Waiting period after a mortgage has been restructured and modified varies among the different lenders due to their mortgage lender overlays. 
  • Many mortgage lenders view a modification the same as a foreclosure. 
  • Many lenders do have mortgage lender overlays on waiting period after a mortgage modification. 
  • However, mortgage lending guidelines only require that you have been timely on your mortgage payments after the finalization of a modified mortgage. 
  • 12 months of cancelled checks and a verification of mortgage will be required to qualify for a new mortgage loan after the final modification of your mortgage loan. 
  • There are many mortgage lenders who do have two, three, four year waiting periods. 
  • If you are seeking a mortgage loan after your loan has been restructured, make sure you make timely payments on your mortgage payments. 
  • Mortgage lenders also want to see no late payments after modification and want to see re-established credit.

Qualifying For FHA Loan After Meeting Waiting Period After Loan Modification ?

There are cases where homeowners lose their jobs and/or businesses and fall behind on their scheduled monthly mortgage payments.  Many folks modify their home loan in order to avoid foreclosure.  For those who had modified their home loan and are back on their feet and want to purchase second home and keep their existing home as an income property, that can be done. It is possible to qualify for a mortgage loan but you cannot have two FHA Loans at the same time if you are not getting a job transfer that is 100 or more miles away where it is beyond commuting distance.  If the modified loan is a Conventional Loan, you can keep that property as a rental and purchase your new owner occupant primary property with a FHA Loan. Selling your home that you had the loan modification done will be the easiest and simplest.

2017 UPDATE On Qualifying For FHA Loan After Loan Modification

This BLOG On Qualifying For A FHA Loan After Loan Modification was revised on March 7, 2017 by Gustan Cho NMLS 3029 of The Gustan Cho Team at CrossCountry Mortgage Inc. NMLS 3029. CrossCountry Mortgage is a national full eagle Fannie/Freddie/Ginnie Direct Lender licensed in 50 states with a national reputation for no lender overlays on their government and conventional loan programs and its 21 day closing on all home closings.

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