Did you know that mortgage refinancing is one of the best options available for you? Refinancing provides excellent benefits for most homeowners. If you refinance, you can obtain better rates, reduce monthly payments, and take cash from your equity.
Technically, routine mortgage refinancing sounds great and no one can deny that there are many homeowners who already enjoyed its benefits. Unfortunately, refinancing could be a big challenge if you have low credit score. You may not be able to qualify easily and the process could become frustrating. If you want to beat the system, here are some practical steps that you can follow when looking for the best refinancing rates with low credit score.
Closely Look at the Historical Mortgage Rates
You should take time to do some basic research about historical interest rates. You need to identify the historical rate trends for the loan you want. Then compare this trend to the current rates prevailing in the market.
So if you are planning to obtain a 30-year fixed rate mortgage, then look at the trends for this type of loan. More specifically, study the 3-month trend, annual trend, and 3-year trend. Then compare the interest rates today in order to see if there is a good reason for you to obtain a new interest rate.
Analyze Your Credit Reports
You should carefully analyze your credit report from the 3 major monitoring agencies. When analyzing the report from the 3 credit reporting bureaus, you should not only look at the scores. You need to scrutinize each line to see the 3 best things and the 3 worst things there. Select the 3 best items because this will serve as your leverage. Then look for the 3 worst items so you can explain them properly to the refinancing lender.
Shop Around for Bad Credit Refinance Lenders
As much as possible, you need to look for at least five mortgage refinance lenders that offer loans for those with bad credit. Look online and select reputable bad credit lenders. If you have at least five lenders in your list, then you can get different offers. This will enable you to make the right decision.
Call the Lender
If there are viable offers from refinance lenders, avoid filling out online forms. The best thing that you can do is to immediately call a prospective lender. This will give you the opportunity to have a dialog with the lender to clarify any issue with your credit score. This is the best time to point out your best 3 credit report items and to explain the worst 3 items. Call every lender in your list to know different offers that may be suitable for you. Remember, bad credit lenders are not only interested in your credit score. They may also look at the specific items that can be found in the report.
Last but not least, you must compare the offers you obtained from the bad credit lenders. Select the best proposal and call the lender. Through negotiation, it is possible to get a much better rate from your prospect lender.
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