While few bad credit mortgage lenders stayed in business after the housing crisis, homeowners with credit problems still have a variety of options for home refinancing depending on their individual circumstances. To find out if a home refinance is possible for you, enter your information on this page and…
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1.Check your credit. You should get your free credit report from all three credit bureaus (Experian, Equifax and TransUnion) and pay for your credit score so that you can see your current credit profile. If your credit score is under 700 or 720, your best option will likely be an FHA mortgage, but remember that FHA loans require mortgage insurance no matter how much home equity you have. If your credit score is close to 700, you may want to consult a lender to see if there are ways you can improve your score to qualify for a home refinance.
2.Check your home value. In most housing markets, home values have increased, which means you may have more home equity than you realize. The lower your loan-to-value, the less risky you appear to a lender, so having extra home equity can help you qualify for a loan.
3.Consult a lender. Your best resource to discuss your home refinancing options is a lender with experience with a variety of loan programs. You can ask your current lender to review your loan options, but you should also shop around with lenders to see if you can be offered a loan with lower fees or a lower interest rate. Complete the form on this page to shop for the lowest mortgage rates.
4.Look into your loan options. If your bad credit is related to debt problems, you may be hoping to refinance and pay off your credit card debt. A 'cash-out' refinance typically requires more home equity (at least 10 percent) and a lender will carefully review your debt-to-income ratio to make sure the payments are comfortably affordable. If you can't use your home equity to pay off your loan, another option is to lower your mortgage payments and use the savings to pay down your debt faster.
Whether or not you qualify now for a mortgage refinance, you should consult with a lender to discuss your options and to prepare for a future refinance. A consultation with a lender can help steer you on the path to reducing debt and improving your credit.