Attempting to refinance your mortgage after your credit score has taken a nosedive into the “poor” category can be a very difficult task to accomplish. Many lenders will not refinance the mortgage if the person’s credit score is below a certain level and the ones that will refinance the mortgage will do so at a much higher interest rate than they would charge to someone with a better credit score. There are a few things that should be kept in mind when refinancing a mortgage with a bad credit score to help you get the best deal for the best price.
Shop Around For Rates
Many people that are attempting to refinance their mortgage with a bad credit score make the mistake of accepting the first offer extended to them because of the difficulty of refinancing with a poor credit score. Don’t let the fact that you have a low credit score prevent you from shopping around for the best offer. Although the interest rates for the refinanced mortgage will be higher across the board, the offers from some lenders may be several points lower than the deals offered by some others. This can translate to a savings of thousands of dollars over the life of the mortgage loan. By carefully considering multiple offers from different lenders, you should be able to find a better deal than if you went with the first offer extended to you.
Look Out For Scams
As the fallout from the housing crises continues, more and more lenders offering amazing deals on refinancing continue to appear around the country. Although most of these lenders are genuinely trying to help people that have found themselves in a difficult situation, there are a few that exist solely to prey on unwary individuals during a desperate time for them. It is best to keep the old saying in mind “If it seems too good to be true, then it probably is too good to be true.” If something seems wrong about the agreement that you are being offered, it is best to ask for independent opinions before signing your name to any document offered to you.
Examine All Documents Carefully
One of the biggest reasons that people get into problems with their mortgage is because they didn’t understand all of the terms used in the mortgage agreement or that they neglected to read all of the documents carefully and missed a vital piece of information. It is very important to read all of the documents presented to you and to ask questions about anything included in the documents that you do not fully understand. If the lender seems reluctant to discuss any of the issues that you bring up in the documents, it may be an indication that something in the agreement will not be beneficial to you.