How to Improve Your Credit before Refinancing
If you’re considering home mortgage refinancing in Las Vegas, no doubt you’ve been tempted by the record low interest rates. And who can blame you? With rates this low, you can lower your monthly payments while tucking away extra for savings and building your home equity.
However, if you have bad credit, you may need to take steps to improve it so that you can benefit from the lowest interest rates.
- Obtain a copy of your FICO score. You can get a FREE copy from AnnualCreditReport.com.
- Evaluate your score. Use the information found here as a guideline.
- Fix errors in your credit reports. Carefully scan your credit reports for mistakes. If someone else opened a line of credit in your name, for example, that can negatively impact your credit score.
- Make a list of your debts. Include all of your outstanding debts: hospital bills, credit card bills, auto loans, student loans and yes, your mortgage.
- Organize your list by highest interest debt. Determine the interest on each of these debts and arrange them by placing the highest interest debts towards the top.
- Make a plan for paying off your debt. Devise a plan that utilizes your extra monthly cash to pay down your debt. You may have to forego things like extra dinners out, movie nights or extravagant purchases in order to accomplish your financial goals. Your plan should approach paying the items on the top of the list first. In fact, don’t even worry about the items towards the bottom until those towards the top are crossed off.
- Stick to your plan. One of the crucial factors when trying to improve your credit score is persistence. Decreasing your debt burden and improving your credit isn’t going to happen overnight but with patience, hard work and careful planning, you will be able to eventually see a rise in your score.
One of the most helpful strategies when you are trying to improve your credit score is to reduce your overall debt burden. Since 35% of your credit score consists of your debt payment history, delinquent payments can seriously damage your score. In addition, try to keep your credit card balance below 30% of the available limit, since mortgage lenders will evaluate your debt-to-income ratio when considering your home loan refinance application.
Arm Yourself with Home Mortgage Refinancing Insider Secrets
With the help of a retired mortgage broker with over 27 years of experience in the industry, I created a 6-part video series to help homeowners avoid the traps associated with refinancing. For example, did you know that for every .25% you unknowingly agree to overpay, your broker obtains a kickback equal to 1% of your loan? During a home loan refinance, this can amount to thousands of dollars in the first years alone. With the help of my free videos, you will learn how to avoid predatory lending and unnecessary markup and obtain a wholesale home refinance loan with no junk fees.
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refinancing your home mortgage loan today.