WASHINGTON, D.C. – November 4, 2013 – (RealEstateRama) — Are you hoping to refinance, but nervous because your credit is not where it should be? Unlike what you may have heard, it’s still possible to refinance your mortgage without great credit. Below, Patricia Bell, President of Gloria Nilson & Co. Real Estate provides us with several tips how.
Start with clear expectations. You may be hearing about great refinance rates. However, without great credit, these will probably not be available to you. “Although you won’t be applicable for the best rates, you can still refinance.” says Bell. “Just be ready for higher interest rates.”
How is your equity? “Your equity may be more important when refinancing than your credit,” Bell cautions. If you have a scant amount of equity, this could be your greatest challenge. “Try applying for an FHA-backed loan, as they’re easier to secure.”
Show your best assets. If your credit history is shady, show your lender that you are, in fact, improving. Show how you’re working hard to pay off your debt. Highlight that you have a long-standing, steady and secure job. Provide any bank statements that show a full savings account, and highlight that you haven’t made any risky purchases—new car? That’s a red flag right there.
“While securing a refinance is more difficult with bad credit, it isn’t impossible. Be sure to put your best financial foot forward and you can most likely still find a lender,” says Bell.