Friday, May 24

How to Refinance Your Home with Bad Credit?

Statistics imply that mortgage rates are rising faster than they ever have. With these bills to pay and bad credit, you may be wondering if it is still possible for you to refinance your home. Here is the short answer- yes, you can! The real estate boom induced by the pandemic has resulted in home values increasing in many parts of the country. Even if you have a credit score below 580, you can refinance your home with just a few simple steps. Here’s how you can still pursue your North East bad credit home refinancing.

Consider an FHA Streamline Refinance

If you have an FHA loan, this can be an excellent option for you. In this process, borrowers with a credit score of even 500 but with home equity of 10% may be approved by mortgage lenders for refinancing.

Portfolio Refinance Loan to the Rescue

A second option if you have bad credit is a portfolio loan. Many banks and mortgage brokers set their own standards for the loan, which may make the other lenders more flexible than typical requirements in terms of the financial criteria.

Find a Co-signer

The presence of a co-signer with a strong credit score gives the lenders more security. Co-signing a mortgage deal can be done with family and friends, so it’s more convenient for you and also gives you flexibility in repayment deadlines.

Utilize the USDA Streamlined Assist Program

If you are eligible, then the USDA Streamlined Assist Program can be an option for you, as the process does not involve credit review. Anyone backed by the USDA, who has made the last 12 months’ mortgage payment, can qualify.

Think About Improving Your Credit

Budgeting, opening a savings account, and prioritizing your bills in terms of urgency- are all ways with which you can improve your credit score. The higher your savings are, the stronger chances you possess for a probable refinancing loan.

In conclusion, we all fall into hard times, which for some of us, result in bad credit. With a bit of planning, and the proper guidance, even someone with a very poor credit score can refinance their home. Streamline refinancing options, assistance programs, the presence of co-signers, and portfolio refinance loans are all options you can consider while you try to refinance your home, even if you have bad credit. Other options are applying for a VA-backed cashed-out refinance loan and exploring an FHA rate-and-term refinance. Basically, there are many options available for you, and remember that you are not alone.