Not to long ago if you had bad credit it was hard for you to get a loan to buy a house. There were not as many options as there are today. That is not true today. Many lenders have programs for first mortgage loans and refinancing as well. Here are some tips on how you may be able to refinance your mortgage if you have bad credit.
First of all try and work with a mortgage professional who specializes in mortgage refinancing for those with bad credit. You may have more options available than you realize. A mortgage loan consultant who deals with bad credit applicants everyday is going to be on top of the different types of loans just for your situation. Your job is to provide all of the information to them in an honest and timely manner. Hiding something that may come up later does neither of you any good.
Did you know you can get a copy of your credit report from the major credit bureaus one time each year. Knowing how your credit score is improving can impact whether you want to refinance as well. Over time previous things that had a negative effect on your credit can go away or be removed. It is to your advantage to know your credit score before you refinance your mortgage.
There are 3 types of mortgage refinancing loans. A fixed rate loan has an interest rate that stays the same over the life of the loan. An adjustable rate mortgage loan is know as an arm for short. In an arm your interest rate adjusts over a period of time. In a hybrid loan the interest rate is fixed for a period of time and adjusts for the rest of the loan. A point is equal to 1% of the total loan amount. Determining whether you want to purchase points when you refinance is one thing to discuss with your mortgage expert. Understanding the 3 loan types will help you decide which interest rate to choose.
As property values have risen over the years many lenders will loan people with bad credit money if they feel secure in the value of the property. If you are refinancing and have seen the value of your home increase since you last refinanced or since your loan originated then you have options. A bad credit mortgage refinance may be possible for you. Consult with a mortgage advisor to see if this is true for you.