Refinance Mortgage Bad Credit – How Its Done

Refinance Mortgage Bad Credit – Overview

Refinancing your home mortgage having bad credit is not impossible. Despite the sub-prime mortgage catastrophe, there are hungry lenders out there vying for your business. There still is a thriving part of the mortgage industry dedicated to only lending to those of you who have bad credit.

The lenders who refinance home mortgages for those of you who have bad credit have gone nowhere in spite of all the negative news you may be seeing everyday in the media. Today, bad credit mortgage refinancing involves more stringent requirements, but with some simple steps you can find a reasonable loan, one that may be similar to that of a good credit homeowner.

Refinance Mortgage Bad Credit – Tip

Step one requires that you make sure your credit report is accurate and up to date. It is estimated that 70% of all credit reports have some type of error that substantially affects one’s credit score. By law, you can get a free annual credit report from each of the three major credit reporting agencies: Equifax, Experian, and Trans Union.

Once you get a copy of each of your credit reports, go over each with a fine-toothed comb looking for errors that likely exist. When you locate errors, you will need to contact that specific agency in writing to dispute the error and either settle it or have it expunged from your record. Even minor inaccuracies can have a significant effect on your credit score.

When your credit report is finally accurate and you still have legitimate bad debt reported on your report, take steps to settle the bad debt by negotiating with the creditor. You’d be surprised how many creditors are will to accept a negotiated settlement of less than the full amount you owe just to clear their books of the debt.

Refinance Mortgage Bad Credit – Conclusion

It’s important to remember that you can refinance a mortgage with bad credit; however, you will likely pay a higher interest rate for the loan. You can circumvent some of the arduous footwork if you deal with a refinance mortgage bad credit specialist. He or she has access to a much broader pool of resources than you, as a consumer will. Just make sure your broker is honest and has your best interests at heart. Don’t be afraid to ask for credentials or references to validate your broker’s history.