If you think your credit score – a simple three digit number – is harmless, well, think again. Credit scores when properly maintained will promise to be your best friend. It guarantees you an easy approval for any mortgage loan and it offers the best interest rates you can have when you borrow money. Poorly handled credit, on the other hand, can hurt you in various ways. If you apply to refinance mortgage with bad credit and they deny you, it is then you realize it is not a friend at all.
Bad credit ratings have been considered as a hindrance to a borrower’s application for mortgage. Mortgage lenders hesitate to grant approval of loans to those who have credit scores of below 700 because they are regarded as high risks. While good credits have a wider array of options available, bad credits do have options to choose from too though limited.
If a person has bad credit, he may still qualify for mortgage refinancing. The typical credit score needed to refinance mortgage is 720 or higher. Nonetheless, there are certain lenders who help people to refinance mortgage with bad credit. They may, however, require additional documents and charge higher interest rates in contrast to those who have good credits. Still, it may be the answer to most of people’s qualms.
A credit score for a refinance mortgage may be low if one chooses to go through home equity. One is also allowed to refinance mortgage with bad credit using this method. A home equity of about 20% allows the person to refinance to the usual mortgage. However, if the home equity is less than 20%, the person might still have difficulty in finding lenders.
Increasing the savings or reserves is yet another way to refinance mortgage with bad credit. It is vital to save up money for the additional closing costs and other fees that are thereby attached. Having extra reserves makes you less vulnerable to the financial problems that may arise later on. An increase in salary or income and in paying off debt on time has its benefits too. It makes you look pleasing to the lenders because of your ability to manage debt on your own thereby lowering your risk as a borrower.
If you do get approval from a lender, do your best to get lower interest rates by putting in a huge amount of initial payment or by using paying points. Paying in large amounts can give you a better prospective and maybe even a full percentage off.
To apply for a refinance mortgage with bad credit is never easy. Typically, mortgage lenders don’t approve those who can’t achieve the credit score needed for refinance. So, if you got the chance you wanted, make sure to pay your bills on time. Follow your agreement with the lenders religiously and do your best to save yourself from dismal credit ratings. Bear in mind that this might be your only chance to refinance a mortgage with bad credit.
If you are just starting out on your own, you may have a hard time getting credit cards or loans because of a lack of credit history. You must build credit to get access to the best credit cards and loans, but you can mess things up if you don’t know how to do it […]
One of the worst feelings you can have is when you have a bill coming due and no way to pay it. You have either spent all of the money or you have to spend it on something more important. You don’t want to have to deal with those phone calls from creditors because you […]
[Y]ou open up the credit card statement only to see another $30 late payment fee assessed. Ugh! You can’t believe you forgot to make a payment on time again. In between running the kids to daycare or school, meeting with clients and taking care of errands on the weekends, some things just get pushed aside. […]
[G]etting approved for a credit card is a sign of responsibility. It can give you freedom with your finances. For instance, you can book a hotel or buy airline tickets, which would be difficult without a card. You should know why you want a credit card and understand if those reasons are good or bad. […]
You hear financial experts preach about getting out of debt. They tell you to cut up your credit cards and pay for everything with cash. While some people may need to follow this advice, you may wonder if it’s the case for everyone. Should you avoid ever having any kind of debt again? Not Avoidable […]
[T]he busy summer season is behind everyone, and the upcoming holiday season is a few weeks away yet. Now is the time to focus on goals you have set. One of the most important is saving money. Fall = Transition Time You are transitioning from the lazy days of summer, times when you spent a […]
[W]hen you hear about identity theft, you may think about all of the public computers in use as well as the credit card machines in stores. While these are all areas that are vulnerable to hackers and those who want to steal your identity, one of the most dangerous areas is at home. Why? Because […]