If you happen to have bad or less than perfect credit and are looking to take advantage of current all time low mortgage rates by refinancing a home or condo, you may think that it is a near impossible task. Rest assured however that you should be able to find lenders, some who specialize in high risk bad credit lending, who are more than willing to work with you, almost regardless of your credit or financial situation.

The first thing you need to do is make sure if your credit rating is even considered “bad”. Here are some examples of “bad” credit.
-Having a credit score of 620 or lower
-Delinquent payments, especially mortgage payments, in past 2 years
-Missed mortgage payments, emphasis on the past year
-High debt payment to income ratio
-Generally having financial trouble making ends meet every month

Do not worry too much about it if you said yes to any or all of these points. A lot of homeowners are facing the same problems and feel too as if they are alone. Another consideration taken into account by a lender is your ability to repay the refinanced mortgage (which should be cheaper monthly than your current one so generally, yes!), how much you owe on your mortgage, and the current market value of your home. If your home is valued at more than you owe to pay off the mortgage, you are a prime candidate for refinancing. With mortgage rates at record lows all across the country, you stand to save a lot of money by taking advantage.

Refinancing a home mortgage with bad credit may have positive benefits long term and short.
-It gives you a chance to repair bad credit
-Refinancing a costly mortgage may help you avoid bankruptcy or foreclosure
-Using equity in your home you can cash out at the refinance and use that money for home repairs or improvements
-You have the opportunity to consolidate debts and pay off others to reduce your monthly spending even more.

If you are sure that refinancing a condo or home mortgage is the correct financial decision for you, you must do a lot of research. You should get any credit problems, debts, or issues resolved immediately, pay off or reduce other debts, close unused accounts, and try to save some cash. Getting your own credit report is always a good choice. This way you can review what potential lenders will be seeing before you apply for a refinancing. You can check for errors and see what you can do to improve and eliminate some of the negative remarks in it. This will give you the upper hand before you even apply for a mortgage refinance. A lender will do a credit check on you almost every single time. Make sure you know what they will be seeing before the even see it. You control your credit report and should be familiar with it prior to pursuing a mortgage refinance.

Do not ever be afraid to ask questions of a potential mortgage lender. Once you get a quote you like get it in writing and shop that exact quote around. Shop it to different until you find a loan with better rates, terms, conditions, or all of the above. This will save you even more cash every month. Pages like mine here are filled with mortgage lenders websites which usually have mortgage calculators on them to give you a rough idea of how much you stand to save should you refinance a home or condo mortgage.

-M Petrone

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