| Getting your mortgage refinanced can save you | | | | mean you can't get a mortgage loan. Here are some |
| hundreds on your monthly mortgage payment. | | | | of your options: |
| Unfortunately, those how need a break the most may | | | | - Conforming loans require four years after filing |
| have bad credit. | | | | bankruptcy |
| The scars of an extended recession that has left | | | | - FHA loans require two years after a foreclosure |
| many without jobs, lost income, and financial hardship | | | | - Hard-money lenders might qualify you within six |
| are showing up on many American's credit reports. | | | | months after a bankruptcy or foreclosure |
| According to a recent report by FICO, nearly 25 | | | | - Subprime lenders may approve you within a year to |
| percent of consumers' credit scores have dropped | | | | two years |
| into the "poor" range. | | | | Credit Scores and Mortgage Rates |
| Not all is lost though. Even those with bad credit can | | | | One thing is for certain, if you have bad credit you will |
| refinance their mortgage or buy a new home and | | | | pay a higher interest rate. Mortgage lenders directly |
| have save the dream of homeownership. | | | | correlate your credit score with the probability they will |
| Here are a few key points to remember if you have | | | | be repaid in full. Therefore, if your credit score is lower |
| bad credit and need a mortgage. | | | | you will pay a higher mortgage rate and most likely |
| Start Repairing Your Credit | | | | have a higher monthly payment. |
| Your first step needs to be paying all your bills, on time. | | | | This may become a challenge in qualifying for a |
| This is the best way to start the process of improving | | | | mortgage refinance or new home--since you must |
| your credit. If you're planning to refinance or buy a new | | | | have the income to support the mortgage payment. |
| home soon you need a good credit track record--even | | | | Seller Financing or Land Contracts |
| if the credit score is still lagging. | | | | One final option in finding a way to buy a new home |
| In addition, you should request copies of your credit | | | | with bad credit is to consider seller financing. In many |
| reports and inspect them closely. Many consumers | | | | cases homeowners, who have endured their homes |
| have errors on their credit reports of which they are | | | | being on the market for months, might be willing to help |
| completely unaware. Taking the time to identify and | | | | you with the financing. |
| remove these errors can immediately lift your credit | | | | These seller financed arrangements are often in the |
| score. Many times it simply requires a letter explaining | | | | form of lease-to-own or land contract agreements. |
| the mistake to the creditor, which will get them to file a | | | | Each contract is unique, but typically these |
| correction. | | | | arrangements collect a payment from you and a |
| Recovering from Foreclosure or Bankruptcy | | | | portion goes to pay the current mortgage payment |
| If you have had a foreclosure or bankruptcy in the | | | | and a portion to build a down payment savings, until a |
| past you need to wait it out. The impact on your credit | | | | time in the future when you have the option to buy the |
| report is about 10 year, but that doesn't necessarily | | | | home with better credit. |