Tips to Help You Refinance a Mortgage with Bad Credit

If you have bad credit and you are considering refinancing a mortgage, you should not put off the idea. Whether it is your first time owning a home or you have refinanced before, here are a few sure fire tips to help you get the best possible rates to refinance your mortgage with bad credit:

Improve your credit score by paying down the other loans you have

When you are looking forward to refinancing a mortgage with bad credit, it is important for you to pay down other loans so that you get a chance to improve your bad credit. This will not only improve your credit score and lower your debt to income ratio, but also increase your available balances, which will in turn have an impact on your credit utilization ratio.

Don’t shop for rates for a long time

As a homeowner, it pays to strategically shop for good rates and conduct lender interviews so that you are sure you are working with someone you can trust. While shopping for rates, avoid the temptation to do so for an extended period of time since when too many credit inquiries are noted on your report, it could raise a red flag to the lenders, effectively hurting your score.

A good shopping period should be between 30 – 45 days and if you manage to find a good lender within this time, it will have no impact on your score, but a period of more than 45 days will definitely hurt you.

Get a Co-signer

If your credit score is not stellar but you still want a mortgage with bad credit, then you may consider submitting your application with a good credit standing. With the cosigner, getting approved will be slightly easier as compared to when you decide to make an attempt to secure financing alone.