Many people believe that because they’re credit has gotten worse over time, they can’t refinance their mortgages. However, this just simply is not true in many cases. Sure you probably won’t be getting a prime APR, however there is still a chance you can refinance out of your current home loan and get into something that makes more long term sense. You most likely will not lower your monthly payment, but if you’re in an adjustable rate mortgage, it may make more sense to get into a fixed rate mortgage and pay more monthly than deal with the future rate adjustments on your current loan. The good news is that once you have a mortgage, no matter how bad your credit becomes, if you can stay current on your home loan payments, your loan cannot be taken away just because you have other debt that you may not be paying. (We recommend you pay all of your debt obligations as required by the terms of your loans)
Finding Bad Credit Mortgage Loans
Refinancing your current mortgage when your credit is sub-par usually means you will need to find high-risk lenders who focus on bad credit situations. These are not your normal big banks and lending institutions. The stark reality is, however, that if you submit a re-fi application to a big bank, and your credit isn’t top notch, they’re most likely not going to take you seriously and your loan will not be approved. However, if you currently have a mortgage with a large bank, you may still have chance of refinancing directly with them, instead of finding a high risk lender to do your refinance.
There are lots mortgage lenders who will refinance a mortgage with poor credit. It might take sometime to you to find the best company for your situation, which is why you should begin searching early, but you may find private creditors that can handle your loan. What you must be prepared for, when you have poor credit, is the likelihood of paying higher rates of interest. Consequently, your repayments are likely to be greater as-well.
It’s important to plan ahead when you’re considering a re-fi and your credit isn’t good. While you might have let your credit score slip over time, work at improving your circumstances, in order to show an honest effort to any prospective lenders. Among the ways you may do this is by receiving a secured bank card with an extremely low limit. Also having a monthly spending limit with funds being paid promptly every month is likely to be a benefit as well. Still another way, would be to carefully monitor your accounts that are being reported to the credit bureaus. The better standing you keep your open accounts, the better your credit will look in the eyes of a lender.
More over, it’s essential for one to evaluate your credit history from all three agencies. Each one reviews differently, and each might have different comprehensive data on your statement. Therefore, it’s essential to check always all three. Because you have no way of knowing which credit bureau the mortgage company will use, it’s best to take care of any errors on all 3 reporting bureaus prior to applying for your mortgage refinancing. This will give you the absolute best chance of getting approved for the loan you need and securing the absolute lowest APR possible.
We recommend applying with Low Mortgage Nation if you’re considering refinancing and your credit is below 700. You can get up to 4 no obligation mortgage quotes and you have the ability to negotiate your rate.
*APR’s & interest rates shown on this page are not set by Credit Flare and may be updated or changed by the lending institution at any time without prior notice. Please read all terms and disclosures with any lender before applying for or entering into any loan agreement. Credit Flare may be compensated if you choose to sign up for offers presented on this page.