Easy Steps to Refinance your Mortgage with Bad Credit

Home mortgage refinancing is a great way to reduce your interest rate and your monthly payments of your existing mortgage. However, if your credit score is poor, it would be difficult for you to obtain a new mortgage loan to refinance your existing mortgage. These days, having poor credit has become a common phenomenon and only few people have escaped it. Usually, lenders charge high interest rates if you have poor credit and some of them just reject your plea. However, if you wisely shop around and reach potential lenders, you can manage to refinance your mortgage even with poor credit. Read below to know how.

Instructions

1) Visit a reliable website like E-Loan.com to know and compare lenders who can refinance your loan. In the website, you will find an online submission form. If you want to refinance your current mortgage with a fixed rate, select a term between 15 to 30 years and mention things like your home’s present market value, balance of your current mortgage loan, name of your present lender, and your bank’ name. If you are looking for the best results, don’t opt to cash out whenever you refinance your home mortgage loan. Further, provide full details of your bad credit history and if you have declared bankruptcy in past.

2) Compare the refinance programs offered by different lenders. Make sure you are comparing such loans that have an interest rate lower than your present rate. Always avoid mortgages with a low introductory rates and Adjustable Rate Mortgages (ARMs). See if there is a penalty if you pay off the loan before or after the fixed period. Further, make sure, if the monthly payments are within your affordability, which include interest, taxes and insurance. There is a website named mortgageloan.com that specializes in providing loans for people with bad credit.

3) Before you finalize, check with the Better Business Bureau (BBB) to know about the lender’ reputation. If the lender is not listed on the BBB website, avoid it. Though a mortgage lender is not required to be accredited by the BBB, it should have a good rating with the BBB. Never accept a bad lender just because you have bad credit.

4) Know your rights as per the law. The Truth in Lending Act (TILA) was created to protect borrowers when they approach to avail a mortgage loan. As per the TILA, mortgage lenders should always disclose their own identity, the amount they are going to finance and the exact monthly payments.

5) Always beware of deceptive advertisements on the lender’ part. Lenders often come up with extremely low interest rates just to attract homebuyers that in fact always turn out to be introductory rates. If you realize that a mortgage lender is assuming deceptive measures to lure borrowers, you should immediately report it to the BBB. 

This is our first guest article, thanks to Sidney Terrell
Easy Steps to Refinance your Mortgage with Bad Credit