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Bad mortgage is like a bad omen, but is should never be viewed as a condemnation to a financial abyss. For those with bad credit, refinancing a mortgage is never easy, but not impossible. If you are in this situation and want to refinance a mortgage with bad credit, here are some valuable tips for you:
Pay down the other loans
Before you think about applying to refinance your mortgage with a bad credit lender, you need to pay down other loans you may have first. This will have a positive impact on your credit score as it will lower the debt-to-income ratio, and effectively increasing your available balances.
Fix errors in your credit report
If your creditors have reported wrong numbers or wrong accounts to the credit bureaus, you will have a lot of problems refinancing your home until you have all these errors fixed. It is of utmost importance to ensure that your credit report is in order so that the potential lenders can carry out their assessment based on up to date and correct credit information.
Don’t take forever shopping for rates
When you have bad credit, it is always a good idea to shop around for great rates because you are looking for the best deals out there. However, you should not be engrossed in the shopping for extended periods of time because lots of inquiries on your credit report may have a negative impact on your score. The ideal shopping period should be between 30 and 45 days, and if you are lucky to find a bad credit mortgage lender within this time, then your score will remain intact.
Find a co-signer
Getting a co-signer is another great way to refinance your mortgage when you have bad credit. All you have to do is find a co-signer with a great credit score to help you get approved. Finding them may take effort, time and a lot of trust on their part, but they will be of great help towards helping you get the mortgage.
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