Refinance Mortgage with Bad Credit

There is no doubt’t Refinancing can hep you save thousands of dollars on your mortgage say for a standard 30 year house loan duration. However, what if you are having a bad credits score? Would you still be eligible for refinancing your mortgage? Well, though its tough to get refinanced when your credit is low, you can nevertheless get refinancing done. The following are few tips on how you can refinance your loan even with bad credit.  

Do Not Anticipate Ultra Low Refinancing Rates - Refinancing with your bad credit is definitely not a cake walk. Though you can refinance, but not at the cheapest interest rate available in the market. The teaser rates that lender s often advertised are basically reserved for pristine borrowers. So, just don’t get fooled by the refinance loans ads publicized on newspapers, TV or on web.

You Will Require Equity in Your Property - Most of the lenders do not refinance your existing mortgage if your home is underwater and you owe more on the property than what it is actually worth it. Reason being, without much equity your loan is seen much riskier and that simply reduces lenders willingness to issue you new mortgage.

Consider Government Insured Loans - Lenders providing conventional mortgages typically insist on having good amount of equity in your property. But that’s not the case with banks offering government-backed loans such as FHA loans, as they are insured by agencies like the Department of Housing and Urban Development. If you have a limited amount of equity in your property your can get it refinanced with a government insured loans. 

Make Your Application Attractive - Bad credit is not the only thing lender will seek in your application. Your entire loan packet should look appealing and attractive so as to get your refinancing done. Therefore, make sure that you try and make your refinancing application and related paperwork complete and up-to-the-mark.

Seek for an FHA Streamline Refinance - Apart from that, if you already have an FHA loan, you may be able to get credit through applying for FHA streamline refinance, a special mortgage product reserved only for current FHA borrowers.

The type of loan doesn’t require an appraisal - which will benefit you if you haven’t built up any equity in the home, and you’re not get for  your work history, income or credit.