In a perfect world everyone would have a 720 credit score and a trouble free credit history. Unfortunately we live in reality and the truth is that many home owners have less then perfect credit scores. While bad credit can make refinancing a home loan difficult getting a mortgage with bad credit is actually easier then you think.
The first thing you must determine is how bad your credit actually is. Knowing your credit score will help determine your loan options and save you the headache of having to apply for a mortgage only to be turned down.
Bad Credit Refinance Options
If your score is 600 or higher then you more then likely will be able to secure a good low fixed rate FHA mortgage. Keep in mind that FHA requires your last 12 months mortgage payments to have been paid on time and your debt to income ratios need to be at or around 42%. FHA will refinance up to 97% of the value of your home so it works well for people with little to no equity in their primary residence.
If your credit score is under 600 and not below 500 you really have no other option but to use a sub prime lender. although they have gotten a lot of bad press lately sub prime loans can help people refinance their homes when other lenders turn them away. However never under any circumstance take a sub prime adjustable mortgage and always opt for the fixed rate. Sub prime loans allow you to refinance with mortgage lates, open collections and many other derogatory credit situations.
However if your credit score is under 500 you have some serious work to do because even sub prime lenders will not lend to borrowers with credit scores under 500. At this credit score level you have two options. You can either invest some time and money into credit repair to improve your scores to the level where you can secure sub prime financing. The other option is for you to use a hard money lender. Hard money lenders typically have very high interest rates and loan fees and should only be used as a last resort. They also only typically lend up to 70% of your homes value so they may not be able to help everyone based on those equity requirements.
By: Darin Sewell
Options For Getting A Mortgage With Bad Credit
February 6th, 2010 by admin No comments »Posted in Article
Tags: Adjustable Mortgage Credit Score Debt To Income Ratios Derogatory Credit Fha Mortgage Getting A Mortgage Getting A Mortgage With Bad Credit Hard Money Lender Hard Money Lenders High Interest Rates Loan Options Many Home Owners Mortgage Lates Mortgage Payments Open Collections Refinancing A Home Refinancing A Home Loan Score Level Sub Prime Lenders Sub Prime Loans
Buying a Car With Bad Credit – Auto Refinancing
February 5th, 2010 by admin No comments »
If your credit score is bad you are left with almost no options for getting a car loan and thus for buying a new car. Banks and other typical lending companies will refuse loans if your credit score is too low. Even if they offer you credit it will be with huge interest rates and the amount might not be enough to buy your dream car.
The good news is that you can make some steps and still get a new car with bad credit. the secret is in auto refinancing. Car refinancing works on the same principal as home refinancing but many people just doesn’t think of it.
The basic principle of car loan refinancing is to take a loan from a lender and than repay it by using the money from another lender who offered you lower interest rates. First of all your monthly payments will be much lower and second your interest rates drop so that you can pay off the balance of your car loan even quicker.
There are few principles to follow when looking for car loan refinancing. First of all remember that the lender who borrowed you the money for the car will probably not give you another credit to refinance the first. So you have to look for a different lender. The next very important thing is to be careful with the interest rate. The whole secret about refinancing car loans is to get the APR equation right. The interest rate of the refinancing loan must be lower than the interest rate of the original loan.
When applying for a car refinancing loan, follow these simple rules to achieve best results:
- The car refinance loan application need to be in the same name as the name on your current auto loan.
- Get your car loan account number ready
- Seek refinance if you have to pay $7500 or more
- Have your vehicle information accurate
- Do not ask for a car refinance loan that is higher than the value of the car.
- Check if there are some additional charges and fees applicable to your new loan.
If you are unable to find a typical bank or lending institution to give you an auto refinance loan, seek online. There are any online financial institutions that offer various types of loans or specialize in refinance. Their applications are online and usually give quick answers.
By: Keith Londrie
Posted in Article
Tags: Application Need Bad Credit Auto Refinancing Basic Principle Buying A Car With Bad Credit Buying A New Car Car Banks Car Check Car Loan Refinancing Car Refinancing Credit Auto Credit Score Dream Car Home Refinancing Lending Institution Loan Account Loan Application Refinancing Car Loans Refinancing Loan Refinancing Loans Typical Bank
3 Bad Credit Mortgage Refinancing Tips For Getting an Approval
February 5th, 2010 by admin No comments »
When you have a bad credit history, a mortgage refinance is most likely the cheapest way to access credit. Depending on the homes value and your equity in it, you can get a cash out refinancing for bill consolidation or home improvements. Or, it is possible to obtain a lower interest rate, and lower your monthly payments. Follow these 3 steps to get the best mortgage refinancing deal you can:
1) Compare Interest Rates
Before signing a mortgage refinancing deal, be sure to compare interest rates between lenders. This should give you a rough idea of what you can expect, and how much you can borrow. The lower the rate is means the more you can borrow for cheaper, which ultimately results in savings. This also allows you to find a better lender, who is offering you a better deal.
Also, make sure that potential mortgage lenders do not access your credit report. Too many people looking into your credit can result in a lowered credit rating. Typically, there is no guarantee on what other lenders will quote you, however, it will give a good idea of where you stand, especially if you know your credit score and tell it to them.
2) Know the details of your Credit Report, and clean it up a little
Before you apply for a mortgage refinancing, make sure you are familiar with your own credit history. Checking for mistakes or inaccuracies can save you a lot of time and hassle. You may even see that your credit is not as bad as you though it was.
If you have the opportunity to pay off small lingering debts, or reduce the cards which are nearly maxed out, this can help. Having your debt spread among a few accounts is better than having accounts maxed out.
3) Get Better Mortgage Terms, Conditions, and Interest Rates
Typically, homeowners who want to refinance, but have a low credit score, need to use a sub prime mortgage lender. These lenders specialize in these loan types, and can often obtain a better interest rate than a traditional bank or mortgage lender. ARM (Adjustable Rate Mortgage) loans typically offer the lowest interest rates. There is a risk though that the ARM will increase, and therefore your mortgage payment goes up.
Always listen and ask about all of your mortgage lenders loan options. Sometimes, you may find one you were not aware of that better meets your financial needs. Something like a chance to refinance your mortgage again in 24 months should your credit improve would be an example of a refinancing option.
Homeowners looking to get a mortgage refinancing today need not really whether or not they will get approved. They should be concerned with what lender or bank is offering them the lowest rate possible. Lower interest rates are truly how a refinancing is the most beneficial for a homeowner.
By: Michael Petrone
Posted in Article
Tags: Bad Credit History Bad Credit Mortgage Bad Credit Mortgage Refinancing Best Mortgage Refinancing Bill Consolidation Credit Rating Credit Score Debts Hassle Home Improvements Inaccuracies Interest Rate Interest Rates Loan Types Mortgage Lenders Mortgage Refinance Mortgage Terms Rough Idea Sub Prime Mortgage Sub Prime Mortgage Lender