How to Refinance a Mortgage with Bad Credit?
A poor credit rating can be a financial hindrance to many things we do in life.
When you're stuck with a bad credit rating you may not be able to buy a car, obtain
a credit card, get a student loan, and, in some cases, even get certain jobs. You
can, however, refinance your home mortgage, even when you have a poor credit rating.
Before you attempt to refinance a mortgage with a bad credit there are some
things you'll want to know. First and foremost, you need to know just how bad your
credit rating actually is. You should always be aware of what's on your credit
report, but if you aren't (and most people are on that side of the boat), this is
a perfect time to find out. Obtain copies of your
credit report with all three of the major reporting agencies and make sure that all
the information being reported about you is accurate. Inaccuracies will need to be disputed
with the reporting agency prior to your attempting to obtain any kind of credit.
You'll also wasn't to be sure that you want to refinance your mortgage under these
conditions. The main reason people will do a mortgage refinance is to get a lower
interest rate. With bad credit, however, you won't be able to get the lowest rate
available. Make sure that the rate you'll be getting is still lower than what you're
currently paying - and that it will be enough lower to make a real difference.
Refinancing for an interest rate that is half a percentage point or one percentage
point lower than your current rate won't be worth your time or the closing costs.
Make sure that the refinance will count for something.
The power of the homeowner
You may be wondering how someone with a poor credit rating can refinance a mortgage.
It is easier than you think because being a homeowner provides you with power that
other people with poor credit do not have. Your home is an attachable asset which
makes you less of a credit risk than someone who does not own a home. It may sound
grim, but lenders know that as long as you own the house they have property they
can foreclose on in the case you default on the loan. Because of this fact, you
can refinance a mortgage, even with bad credit. You may still be required to pay
a higher interest rate than you would if you had picture perfect credit, but as
long as it is lower than your current rate you should do all right.
There are many lenders out there who make it their business to prey on people with
less than perfect credit. The offer loans with high interest rates and exorbitant
fees and make a good deal of money from people who are led to believe they have
nowhere else to turn. Don't get suckered in by such a company. Your poor credit
rating may cause you to pay two or three points more in interest and possibly some
extra fees, but they should not be astronomical. Examine every part of the deal
before you sign on the dotted line. Now, you can get multiple no-obligation and free
refinance quotes from lenders that competing to offer you the lowest rate and best terms
possible that match your individual situation.
Find out here!