Finding the right lender to let you refinance your mortgage
Low credit score? Mortgage refinancing is not a problem
Are you trying to do a mortgage refinance with bad credit? You’re not the only one in that situation so don’t feel so bad. The economy has been in the toilet for the last few years. Unless you’ve been living on the moon with no access to Fox news, or living in a cave in Afghanistan, you already know that. Although even living in a cave in Afghanistan you would still know that the economy sucks! So over the last few years, people have lost a lot of money and assets and ran their credit into the ground. Does that mean that if you’re in that boat, you can’t get any access to credit? No, you can still get credit, but here are some things you should consider.
Banks are still lending, although they have tightened their policies from the good old days when they were handing out money to anyone who had a heartbeat. So even if you have wrecked you’re credit, you still may be able to get a loan. The things you will have to consider is whether it is necessary or even worth it to you.
How bad is it?
You’ll need to know just how bad your credit score is. Maybe you already know or maybe you’re worried that it’s such a disaster that you feel no one will give you a loan. Either way, you’ll need to know. You can find out by checking with any or all three of the major credit reporting agencies. You may have to pay to obtain your credit score even though you’re entitled to a free copy each year. The three major reporting agencies are Transunion, Equifax and Experian.
Once you have your report with your scores, you may be surprised. Whether it’s better or worse than what you thought, you will have to figure out if there is anything you can do in the short term. Paying off some credit cards that have high interest might be an option. If there is any way you can improve your score, go ahead and do it! It will help you in the long run.
Mortgage brokers or lenders can help you improve your score. If you really need a mortgage refinance with bad credit, they can help you access the debt that you desire. It is still to their benefit to try and write as many loans as possible so they should be very happy to work with you.
Is it worth it?
You need to ask yourself if you really need to refinance your existing home loan. Refinancing may not be an option if you have missed mortgage payments in the past. And if you are looking to get into a lower fixed rate, it may depend on how bad your credit score actually is. Do you have an exotic, interest only loan that some fast-talking broker sold you when the market was hot? You should definitely refinance even if you have to pay a higher interest rate than others. Interest rates are historically very low right now so you should take advantage of that situation.
Don’t be shy and check as many lenders as you can. It is to your benefit that you compare as many lenders as you can and what they have to offer. When you are looking to mortgage refinance with bad credit, you’ll find certain lenders will specialize in offering credit to people with bad credit. You still may be able to get a good rate if your score is as low as 660 but if it is lower than that, they will start to go up. If your score is lower than 620, they will be much higher if you can even get a loan at all.
Having a bad credit score isn’t the end of the world. If you plan on doing a mortgage refinance with bad credit, you still have options. You just have to be aware of some of the basic steps to help you potentially improve your score in the short term, and secure a loan that will give you peace of mind.