Refinance With Poor Credit - If you've had a recent divorce, illness, job loss, have made late or partial loan payments, or have been discharged from a Chapter 7 or 13 bankruptcy, it's likely that your credit score has taken a hit.
Even though your FICO score is less than perfect, refinancing with bad credit can be possible by working with one of these bad credit refinancing specialists:
Bad Credit Mortgage Lender: Bad credit mortgage lenders specialize in helping homeowners refinance their bad credit loans. While a traditional bank, lending institution, or credit union may only work with individuals with credit scores higher than 680, bad credit mortgage lenders specialize in working with borrowers with scores in the 500-659 range.
Bad Credit Mortgage Broker: Like the bad credit mortgage lender, bad credit mortgage brokers work with those who have scores in the 500-659 range to help them secure a home refinance. Mortgage brokers do not loan money, but act as an intermediary, assisting borrowers with finding appropriately matched loans.
Stricter lending practices can make even borrowers with great credit feel as though they're jumping through hoops, and there are even more restrictions for those with poor credit. Here's a sampling of what to expect:
Substantially higher closing costs
Significantly higher interest rates, especially for those with scores below 660
20% cash down payment for scores in the 535-550 range, and 25% cash down payment for scores between 500-535
When researching your refinance, get quotes from at least 10-15 lenders, and be sure to ask about fees, requirements, and interest rates. While there's a considerable outlay of funds required to refinance with poor credit, the potential savings could be substantial. To learn more, contact a bad credit lender today.