If you’ve been watching today’s record low refinance rates but think your credit is holding back, you might be surprised that mortgage refinancing isn’t as far out of reach as you think. There are steps you can take to repair your credit and qualify for a lower mortgage refinance rate. Here’s an article on MortgageLoan.com with some tips for your bad credit mortgage refinance:
Can you get a mortgage with bad credit? That depends on how bad your credit is. These days, most lenders won’t write a mortgage for anyone with a FICO score below 620 – that’s pretty much the standard cutoff. Some may demand a score of at least 640-660. On top of that, other factors are involved as well – a higher existing debt load, down payment or equity of less than 20 percent, or relatively low income will all cause lenders to demand a higher score.
If your credit has been a challenge there are fees you should keep an eye out for when mortgage refinancing. One problem with FHA mortgage loans is the requirement for mortgage insurance. In many cases rising mortgage insurance rates negate the benefit of low mortgage refinance rates. Also, origination fees and closing costs need to be recouped from any savings you’re getting from a lower payment before benefiting from your mortgage refi.
You can learn more about avoiding unnecessary fees and markup when refinancing by checking out my free Underground Mortgage Videos.