Options and solutions for refinancing a bad credit mortgage loan
A homeowner with bad credit still has the opportunity to save money if they choose to refinance their mortgage. Interest rates on home mortgage loans are currently so low that it is a popular trend for many homeowners to refinance right now.
One problem that homeowners are facing right now with refinancing their mortgage is that in the past few years the real estate market has dropped and is finally starting to come back. For this reason, some property values have declined at a very quick rate and this has taken away the majority of equity that many homeowners have put into their homes over the past years. If there is not enough equity in the home there are not any banks that will refinance the mortgage because if they had to foreclose on the loan they would not be able to sell the home and get all of their money back.
Also, because of the economic environment there have been many homeowners that have had their credit score go down and this has resulted in being turned down when attempting to refinance their mortgage loan, even though they have a lot of equity in their home. The problem is, in today’s lending market there are not a lot of mortgage options for homeowners with a bad credit score to refinance their home loan. Part of the reason that the economy has gone through this downturn is because the banks used to lend to homeowners who did not have high credit scores. After a while, these same homeowners that were able to get loans eventually defaulted on them. The only option that there is for homeowners with poor credit is to do an FHA loan. However, even with an FHA loan a borrower still needs to have a 620 or higher FICO score to qualify for a mortgage refinance loan.
Finally, the last factor that has held up some homeowners when they try to refinance their mortgage is their proof of income, or lack there of. Proof of income is used by the lender when refinancing to determine the borrowers ability to repay the loan. In the past a homeowner was able to state their income and not have to verify what it actually was. Now, when refinancing mortgage loans the borrower will have to verify their income with tax returns. This has made it hard for many small business owners. But with the experts at MortgageRefinancing.com, each homeowner can be assured that they are getting the best mortgage refinancing options available to them.
Apply Now for a free consultation!