Refinancing your mortgage with a poor credit rating is easier than ever. Here are several tips to help you qualify for a new mortgage with bad credit. Having a poor credit rating won’t stop you from refinancing; it simply means you will have to pay for the financing. How much more depends on how much time you are willing to invest on your application prior to applying.
How Bad Credit Affects Your Refinancing
Having bad credit affects the interest rate and terms on the mortgage loan you will qualify for. The worse off your credit is, the higher your interest rate and fees will be. Before you start applying for a new mortgage you should spend some time cleaning up your credit. Start by reviewing your credit records for errors; if you find errors you will need to dispute them with the credit agency responsible.
Applying for a New Mortgage
Having a poor credit rating may require you to seek a mortgage from a specialty lender known as a “Sub-prime” mortgage lender. These lenders specialize in mortgages for homeowners with poor credit. A mortgage broker may be able to place you with a lender suited for your financial situation; if you do not use a broker be prepared to put in the time required to comparison shop for the best mortgage offer.
After You Have the New Mortgage
Once you have a new mortgage you need to concentrate on making all of your payments on time and using credit wisely. Once you rebuild your credit you will have the opportunity to refinance again with a traditional mortgage lender and receive more competitive interest rates and better terms.