Getting a Mortgage Refinance With Bad Credit is Easy

by Gray Peters

Having bad credit does not have to stop you from getting a mortgage refinance. What seemed nearly impossible to some, is now fairly easy to accomplish. In fact, many online lenders are fighting to get your business. Even though people with bad credit are risky borrowers, many lenders will offer them a mortgage refinance because they can simply combat these high risk borrowers by a slapping them with a higher interest rate. Since rates are at record lows for people with good credit, the rates you can receive with bad credit may still be low.

While getting a mortgage refinance with bad credit can be simple, be sure to shop around for the best interest rate. Also, each lender may have different types of loans they offer, so find the best loan that works for you. For instance, some loans allow you to purchase points. Mortgage points allow you to pay more up front, but you will receive a lower interest rate for the life of the mortgage. You can also choose between a fixed or variable interest rate loan. If you choose a variable rate mortgage, also known as an ARM, understand how often the rate will change and at what percentage it can increase or decrease. With rates so low now, it is more advantageous to refinance with a fixed interest rate.

Be sure to check for any fees and how much the lender will charge you to complete the refinance. Some lenders are cheaper than others. If the purpose of the refinance is to lower your monthly payment, make sure you can afford the new monthly payment before you sign the loan papers. Also, make sure the new mortgage does not contain a pre-payment penalty, or you could be penalized for refinancing or paying the mortgage in full early.

To get a mortgage refinance with bad credit, apply online by filling out an application form. An agent will usually contact you to discuss your options. Look for lenders who specialize in mortgage refinances for people with bad credit. Agents from these lenders can help you choose the loan that best fits your needs. The purpose of the refinance will determine what type of loan will best fit your needs and how it will benefit you. If you have a Fannie Mae or Feddie Mac loan, ask the lender about Obama’s national mortgage refinancing program.

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