Bad Credit Mortgage Refinance: Take it Step by Step

By Gabriel Traverso
Mortgage Credit Problems Columnist

Getting a bad credit home loan refinance doesn't have to be difficult or painful. Regardless of why you want to refinance your mortgage, either for a lower rate or a lower monthly payment, the process is simple and straightforward. Sometimes it helps to outline the steps you need to take.

Refinancing your mortgage may seem confusing, with rates, closing costs, and other fees to worry about. But things don't have to be complicated. There are four basic steps to follow when refinancing your home loan, regardless of whether you have bad credit. If you follow these guidelines you should find that refinancing your mortgage is a simple process.

Step One: Check your credit report. If you have bad credit it is even more important to keep a close watch on your credit report. You want to make sure that all the information is accurate before you apply for a bad credit mortgage refinance.

Step Two: Shop around! Check with multiple lenders. Refinancing your mortgage is a major investment. Like any other major purchase, the smart thing to do is shop around for the best price. It is easy to compare lenders online without doing too much legwork.

Step Three: Compare costs. Get costs from each lender for the same type of loan and the same amount. Compare fees, points, and mortgage rates -- and make sure you are comparing apples to apples.

Step Four: Negotiate. Just because you have bad credit doesn't mean you can't ask questions about what can be negotiated or fees that can be waived. Many lenders will work with you, but you have to ask. No one is going to give money away.

Do Your Homework before Refinancing

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If you want the best deals the task is up to you. The better prepared you are, the more likely you will be to get the best deal possible. Mortgage rates fluctuate, closing costs will differ from lender to lender, but the process for refinancing your home loan stays the same. Write your questions down or prepare a checklist and you just might find that you enjoy yourself while you're at it.

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