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Updated almost 7 years ago, 03/15/2018
HELOC loan modification and FICO
My HELOC is coming to the end of it's draw period and my income has changed so that I have not been able to qualify for a new loan. Since interest rates are changing I don't want to stay with the HELOC to the end of the term. My credit is excellent and I have no debt other than the HELOC but my DTI is high. No late payments, virtually no credit card debt, no other loans other than the HELOC. LTV is 70-80%.
I have been offered a loan modification by the bank but they have said that it may affect my credit score. The terms of the loan is 30yrs @ 4.00% with no fees. My current HELOC is 15yrs at prime -1.01. I have been told that the modification is reported as a 'Government Modification' and has a greater negative effect than a ReFi.
My questions: how does the loan modification affect my credit history? How can I get a new mortgage with a low AGI?