Refinancing your mortgage can be a good way to save money over the life of your loan and lower your monthly payments. But if you have bad credit, it can be harder to get a refinance approved.
- Improve your credit score: Raising your credit score can help you get better terms and rates on your refinance.
- Think about loan programmes backed by the government: If you have bad credit and are having trouble getting a refinance, you might want to look into FHA loans, VA loans, or USDA loans, which are backed by the government. Most of the time, you need less of a credit score and less of a down payment for these loans than for traditional loans.
- Work with a mortgage broker. A mortgage broker can help you find lenders who specialise in bad credit mortgages. They can also help you understand the different types of mortgages, such as fixed-rate, adjustable-rate, and government-backed loans. They can also work to get you better prices and terms.
- Be ready to provide more paperwork. If you have bad credit, lenders may ask you for more paperwork or information. Be ready to show pay stubs, tax returns, and other proof of your finances to help your application.
When refinancing a mortgage with bad credit, it’s important to remember that it may be harder to qualify and that the interest rates may be higher. But there are other things to do. Think about FHA, VA, and USDA loans, which are all backed by the government. Most of the time, you need less of a credit score and less of a down payment for these loans than for traditional loans.
This person can help you find lenders who specialise in subprime mortgages, which are mortgages for people with bad credit. Most of the time, these mortgages have higher interest rates, but they may be easier to get.