New York Mortgage Refinancing

Good Credit Refinancing: How Good is “Good”?

Gone are the days when good credit got you all the things you needed in life: reasonably-priced car loans, good credit card rates and competitive mortgage interest rates. Now that good is the new bad, homeowners with less-than-desirable credit scores are wondering: can I refi my home loan?

How Does Your Credit Measure Up?

Credit scores are classified based on a formula that assesses an applicant’s borrowing risk. The higher the FICO score, the lower the risk. The scores can also be classified based upon how the lender will be treated by borrowers; those with a higher score will obtain better interest rates and terms, for example. The FICO score classification is as follows:

• Excellent: 800 and Higher
• Very Good: 700-799
• Good: 680—699
• Okay (or Fair): 620—679
• Poor: 580—619
• Bad: 500—579
• Very Bad: 499 and Lower

By law, you are entitled to three free credit reports per year. Recently, the three nationwide consumer reporting companies set up a central website through which you can order your annual report. After obtaining your free credit report from AnnualCreditReport.com, compare your credit score to the above FICO scores.

If your score is below 680, take steps now to improve your credit before refinancing if you want to obtain the best New York mortgage refinance rates. Keep in mind that even with a score of 499 there is probably a lender out there who will approve a loan for you. However, the lender will make up for the risk by charging you outrageously high fees that you may not be able to afford to repay.

Home Loan Refi “Insider” Secrets

While good credit is an important thing to consider when approaching your New York mortgage refinance, it needn’t be the be-all-end-all. Homeowners with modest credit scores can still achieve successful refinancing by learning the rules and playing the game. The fact of the matter is: you may not qualify for the best mortgage interest rates. In fact, you may even qualify for rates that are higher than your original mortgage loan. However, since you are refinancing for a lower principal amount, you will still be able to obtain significantly lower monthly payments and lower interest over the life of the loan.

Before you decide to opt out of New York mortgage refinancing because of bad credit, consider how refinancing for your new principal amount will benefit you. However, remember that refinancing does come with significant costs. Be sure you are able to absorb the associated costs of refinancing before you refinance your home loan.

Avoid unnecessary junk fees with your New York mortgage refinancing. Register for my 6-part video series and learn how to maneuver the home loan refi process like a mortgage insider. Let me help you obtain the lowest rates during your New York mortgage refinance; arm yourself with the tools you need to navigate your home loan refi like a pro.

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