Bad Credit Loan Mortgage Refinance

It is very possible to refinance a mortgage with bad credit and improve the interest rate while you reduce monthly payments. There are many things to think about when you have a bad credit situation. First of all, if you are refinancing an old loan and had bad credit when you got that first loan, you probably are paying very high fees and interest rates. If the mortgage was obtained when you had good credit but it was during the 1980s of 1990s, you could also be paying very high interest rates. If now you are in a bad credit situation, you may believe you cannot lower those high interest rates on your existing mortgage.

The savings incurred with today’s extremely low interest rates are worth investigating to see if you can get lower interest rates and pay less monthly. To refinance mortgage loans with bad credit, you need to be careful to not make the credit score go down by having a bunch of inquires for credit appear as you are searching for a new refinance loan. Do not allow any company or person to check on your credit record.

If you still have a low credit score, to refinance a mortgage with bad credit you should take about six months and work on getting your score up higher. Pay down bills, leave all accounts open, do not change jobs or move.

Remember there are unscrupulous lenders everywhere, and their ads are very attractive, especially to persons with bad credit who desperately want to refinance a bad credit loan. They add in hidden fees and charges and may ask borrowers to lie on applications. Some traps are penalties for pre-payment, unannounced interest rate changes and overcharging for appraisals or setting appraisal amounts higher than current home values.

To refinance mortgage loans with bad credit you must understand you will not be likely to get the lowest rates that are hovering below 5%. But there are refinance loan rates between 4.5% and 8.5% that you might qualify for. You should do research and ask around; do not let them run your credit score. See what the offers are and all fees, interest rates and possible penalties in order to compare offers. If they will not tell you, go elsewhere and forget them.

Start with your current banker or credit union. Credit unions have very low rates for members; it may be worthwhile to join one and look for your loan there after about six months. Bad credit loan mortgage refinance is possible, but stay away from any lender who specializes in bad credit loans. They always have hidden fees or bait and switch schemes where they draw you in with one rate and stick you with another higher one.

Bad credit loan mortgage refinance loans are available. There are lenders who will give you a great deal and an honest deal. Keep on improving your credit score, get your free credit reports from www.annualcreditreport.com, and eventually you will find your bad credit mortgage refinance loan.