Many Americans have a less than stellar credit history, but there’s no reason to let bad credit stop you from doing something as large as refinancing your mortgage. The world of mortgages and lending can be a confusing place where very little makes sense. For the average person it’s tough to know if you’re getting the wrong end of the stick so to speak. Don’t let refinancing be a giant headache. Here are a few tips on refinancing your mortgage even with a bad credit history.
The very first thing you want to do is clean up your credit score as much as possible. This means avoiding making only the minimum payments on your debt, pay your bills on time, paying off your credit cards and of course limiting your spending with credit cards during this period. You should obtain a copy of your credit score so you know exactly what you need to improve. You should also check the report carefully because you have the right to report any errors you find. Improving your credit score can actually happen faster than you think so be persistent and keep at it. You can also contact a company such as Ace Mortgage Loan Corporation who help with the refinancing process.
As a general rule, your monthly payments, including mortgages, auto payments, credit card bills, etc, should not exceed 43% of your total monthly income. Getting your payments down to the 43% mark will help to stabilize your credit and also give you more monetary assets. Having assets will help in the long run by allowing you a more attractive mortgage rate.
You should also be aware that you don’t need to refinance your home without help. There are government programs designed to assist in the refinancing process. HARP (Home Affordable Refinance Program) is designed for those who are not behind on their payments, but have been unable to refinance their home because of a decline in value. There are several qualifications you must meet to be eligible for HARP. Another program is HAMP (Home Affordable Modification Program), which is for those who are employed, but still struggle to make mortgage payments. Both of these programs are free of charge, but you should act quickly as they often take some time to complete and they are set to expire on Dec 31, 2013.
Looking for a mortgage in Coral Springs, FL? Get help from Ace Mortgage Loan Corporation.