Mortgage Refinance With Bad Credit

How To Refinance A Bad Credit Mortgage

If you are thinking about refinancing your mortgage you aren’t alone, many people are considering refinancing their mortgage while interest rates are low. However, many people have suffered financial set backs during the recent economic recession, and their credit score reflects their past problems. Is it possible to apply for a mortgage refinance with bad credit? The answer is yes. You can still find lenders willing to work with you, even if your credit score is poor. There are a few tricks to refinancing with bad credit that may help your chances of obtaining the lowest interest rate.

Before you begin to refinance bad credit mortgage, you should obtain a copy of each of your credit reports for a thorough review. Nearly 80% of all credit reports contain an error on them, with statistics pointing to two or more errors per report. It is also important to obtain a report from each agency; they will all list different information. When you have your credit reports, carefully review each for any type of mistake, including duplicate entries.

Many credit reports will contain errors that are a simple keystroke error of an account number. This double entry will increase your debt burden and drop your credit score. Dispute any and all problems that you find on your report immediately, preferably using the online dispute method for faster results. The credit bureaus have thirty days from receipt of your dispute to verify the accuracy of the account or to remove it from your report. Your credit score will improve as these mistakes are removed. One of the simplest ways to improve your credit is to make timely payments for two consecutive months. If you pay all your bills on time, and for the exact amount, your credit score will instantly improve.

During this sixty day period refrain from applying for any new credit lines. Each time you apply for credit your score will drop. Do not change employment during this period and avoid co-signing any credit lines for friends or family. Sixty days is the key to improving your credit, and ultimately reducing your mortgage interest rates. During this time frame your score will also improve because any mistakes will have been removed from your credit report.

Refinancing your mortgage to a lower rate is always a wise decision. When you reduce your interest rate, you reduce your debt. The lower your debt, the more financially secure you become. It is financial stability at its finest.

Mortgage refinance with bad credit is a great way to rebuild your credit rating again, while creating a better financial life now. Remember, in the very near future you will be able to refinance again to a better rate. It is important to take control of your finances in any way possible. When you refinance bad credit mortgage into a lower, more secure loan, you are doing just that: taking control.