Posted: 15 Jun '18

Take the Right Steps to Refinance Your Mortgage with Bad Credit

Refinancing a home loan allows homeowners to take advantage of lower interest rates, saving them hundreds, or even thousands, of dollars over the life of their mortgage. But for homeowners trying to refinance their mortgage with bad credit, can have their struggles. While refinancing a mortgage with bad credit can be a challenge, there are steps you can take to improve your chances of getting approved. Here are three tips for obtaining a new home loan.

Prepare Your Application

When refinancing a mortgage with bad credit, the first thing you'll need to do is prepare an attractive loan application. Having a good credit score is undeniably important, but that's not the only thing that lenders will be looking at when assessing your application. You can significantly increase your chance of getting approved for refinancing by compiling an application that demonstrates your ability to repay your debt. This will involve gathering your bank records, pay stubs, tax returns, and any other documents that show lenders you pose minimal risk.

Be Realistic

It's important to be realistic about the interest rate you'll be able to secure. Prime lenders such as banks, credit unions, and trust companies reserve their most attractive interest rates for borrowers who have near-perfect credit histories. When refinancing a mortgage with bad credit, keep in mind that you may not be able to qualify for the lowest rates available in the lending marketplace.

Consult with a Lending Specialist

When refinancing a mortgage with bad credit, it's a good idea to consult with a lending specialist to discuss all of the options available to you. Not only can a lending specialist provide you with valuable advice about how to improve your current financial situation, but a lending specialist can also help you calculate how much mortgage you can afford while still meeting your other financial obligations. A mortgage lending specialist also has access to loan products that are not generally available to homeowners applying for refinancing on their own.

Refinancing a mortgage with bad credit doesn't have to be impossible. With the help of a lending specialist, you can take advantage of lower interest rates that will make paying off your home debt a reality. Contact us today to discuss your current financial situation and determine whether refinancing a mortgage with bad credit is the right choice for you.