Question by zmneuro: Can I refinance mortgage with bad credit?
My credit was ruined as I went behind mortgage credit card payments due to job loss in 2010. My house was in foreclosure. Now I have new career and stable job, pharmacy web I make approx. 95K, diagnosis no rx and my mortgage balance is approx. 220K. I am wondering if it is realistic for me to try to take advantage of current low mortgage rates.
Best answer:
Answer by the kid
Nope, you still need good credit.
Give your answer to this question below!
Have you been working for 2 solid years?
Do you have $ 0 in credit card balances?
Are all negative items on your credit reports paid off?
^ this is a requirement. No items in collections !
Your home cannot be underwater.
Then, get your credit score at MyFico.com – cost about $ 20.
Get that real fico score. Not some other type of fake score.
That score will have to be above 640.
740 or above will get you those “best” interest rates advertised.
Before you pay for the score, get those 3 credit reports for free once a year at
Annual Credit Report.com https://www.annualcreditreport.com/cra/index.jsp
No credit/debit card required.
Make sure they are in perfect condition.
Again, pay off credit cards in full. And no items in collections.
Short answer is no. The longer answer is that you do not have enough time since your credit problems for a mortgage lender to be willing to take the risk of lending to you.
Some great questions asked below – how is the rest of your debt situation? Do you have money saved for closing costs, etc?
While refinancing brings immediate relief in most cases from interest payments, its hard to qualify especially now after the market went south a few years ago. Even with a credit score over 700 and none of the negative stuff you outlined above I barely qualified for a VA refinance. Not trying to disillusion you but get your financial house in order before considering a refinance.
A lot depend on what you have done since you were last in foreclosure and current year.
If you have paid your mortgage as agreed for the past two years, you might consider requesting a mortgage only refinance. In this request, if approved, your mortgage lender would only look at how yo have paid your mortgage for the past 24 months.
Your mortgage lender might consider 1-2 mortgage late payments in the past 24 months. Even if you were late, most of the time. if your late mortgage payment did not exceed 30 days then your lender might not consider these as late payments.
Failure of your current mortgage lender to entertain a mortgage refinance, you might consider contacting a mortgage lender that is approved by FHA for this refinance. The requirement for a FHA mortgage loan is not as stringent as those of a conventional mortgage loan. These mortgage loans are government backed, thus the approval requirements are different. You would also not need a high credit score for a FHA mortgage loan.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”