Individuals with poor credit were prevented from applying for a first mortgage loan in the past if they had bad credit. Mortgage companies would avoid approving a loan to applicants with poor ratings. Those who already owned a home could not qualify for a mortgage refinance loan.
Increasing competition in the market today has led to more options for people with a poor credit history. Consult a mortgage advisor who specializes in applicants with low credit scores. There are fewer options available to applicants in this position, but an advisor is often aware of possibilities the average lender may not be aware of and may be able to direct you to a program that could work for you. Know what information the mortgage company will use to when coming to a decision.
Take advantage of your right to obtain a free copy of your credit report annually and avoid companies that offer "free" subscriptions with their service programs. Compare your most recent credit report to past ones. This will allow you to know if your credit is improving, stabilizing or deteriorating. Just because your credit rating is low does not take away the right to dispute information on your credit report that might not be accurate. Mistakes happen every day and by disputing those errors, your credit rating will often increase.
Items on your credit report will no longer show up after a period about ten years (7 years in some countries). Bankruptcies will disappear over a similar time frame. When speaking with a bad credit mortgage advisor it is very important that you are open and honest about your financial situation. Bad credit mortgage refinancing is a tricky proposition and your advisor will be better able to help you if they know exactly where you stand.
Otherwise you are at risk of not getting the best possible mortgage refinance loan for you. Discuss all options with your mortgage advisor. If you do not understand the information, ask questions. Bad credit mortgage refinancing can be confusing. Never act like you understand something if you do not! You always have the right to decline signing a commitment. Your individual credit situation will dictate your options to an extent, but bad credit does not mean you are without choices.
Your interest rate will be higher than someone with good credit. Fixed rate mortgage refinancing loans are harder to get, but with adjustable rate mortgages (also called ARM) and hybrids you will find an option that works for you. Final word: Do not do anything you are not comfortable with.
Trust your instincts. Read the fine print. If you are still confused, ask a trusted friend or family member to review proposals with you and offer advice. You do not have to make a decision alone.
Want to know more about mortgage refinancing? Check out www.allaboutmortgagerefinancing.com and find out about refinancing mortgage with bad credit and other related topics.