Refinancing
With Bad Credit
Finding a
good lender to help you with refinancing your home loan can be tricky if you are
refinancing with bad credit. There are plenty of predatory lenders out there who
would like to take advantage of you with excessively high interest rates and
fees. The key to finding a good lender is to know what are reasonable terms and
to compare lending companies.
Look At Your credit
Report
Credit
records are not perfect accounts. Before you apply to refinance your loan, you
should check to see that all your information is correct. If you believe there
is a false record, resolve it with the credit reporting company.
You also want to know what your credit score is. The lower the score the higher
rate you will have to pay, but at least you will have an idea of what to expect
from a lender. Paying three to five additional points is common for people with
bad credit history.
Lenders
offer different rates for the same type of loan, so shop around. The easiest way
to compare quotes is to use an online website. By entering your information
online, companies compete for your loan, offering you better rates. The internet
also allows you to compare
mortgage lenders outside your local area, possibly
finding a better deal.
Once you receive offers, compare the rates and fees. Often the fees are where
lenders make their money. Adding up the interest and fees, and comparing that
figure will give you the true cost of the loan.
Look For A good Deal
Mortgage
lenders increase their profits by pushing loans with high interest rates and
points. Some lenders will push these types of loans even if they aren't best for
you, so beware of fast-talking dealers. Be sure to read the terms and look for
hidden fees before you sign the paperwork.
Online mortgage companies eliminate some of this risk of refinancing with bad
credit by requiring mortgage lenders to state their terms online. Online quotes
are also more competitive since lenders know you are probably shopping around to
refinance your loan. Once you have an offer, print out the terms for your
records.
Mortgage Glossary9
