Improved credit score ratings help to bring down the cost of borrowing. Take out a bad credit mortgage refinancing loan and save money every month. There are only a few consultants that offer bad credit loans guaranteed approval.
Bad credit mortgage refinancing loans could help to save money, but only in certain circumstances. The customer not only needs an improved credit rating, it is also essential that the applicant has sufficient home equity, a manageable level of debt, and a stable work history. As lenders are struggling to cope with the volume of subprime mortgage loan defaults, getting acceptance is now far more difficult. In order to get approval for the best poor credit mortgage loans, steps need to be taken to repair credit. Even a slightly better credit score can lead to a reduction in monthly mortgage payments.
Fast Credit Repair for the Best Bad Credit Mortgage Refinancing Loans
Although adverse-credit will show on a personal credit report for a period of seven years, it is relatively easy to benefit from an improved credit rating within two to three months. This doesn’t mean that the best deals will suddenly become available, but customers will be able to qualify for the lowest interest mortgage loans with bad credit. These credit report history repair methods will help:
- Always check for credit report errors and get these corrected before applying for a bad credit mortgage loan. Consumers are legally entitled to a free credit report by calling (877) 322 8228 or by visiting annualcreditreport.com. The standard cost is $8 to $9.
- Avoid partially settling old credit card debt that has lapsed under the statute of limitations. It has the effect of re-aging debt and gives creditors the opportunity to go through the courts to recover their money. This will lead to a lower credit rating.
- Don’t close down obsolete credit and store cards. Reducing the amount of available credit will be interpreted negatively by lenders as it is indicative that a customer has used up a higher percentage of their maximum available credit.
- Never perform a credit card balance transfer from a high to a low limit card. Other customers make the mistake of transferring all revolving debt to a single card. Total credit utilization accounts for up to 30% of a FICO score and is the second most important criteria to the repayment history.
- It’s better to spread debt across several cards than have all debt on a single card. Although using the card and settling the full balance will result in a higher credit score, customers are advised to avoid using more than 30% of the allocated credit limit in a single month.
Poor Credit Mortgage Loans Require Sufficient Home Equity
Despite the fact that the most effective way to get bad credit mortgage refinancing loans is through an improved credit rating, a higher level of home equity is almost as important. The higher the house deposit or level of equity, the more affordable the bad credit mortgage loan. Customers with a history of adverse credit will usually be expected to provide a minimum of 25% equity. In the event of default, it helps to ensure that there is money from the same to pay off the loan should a forced sale ever become necessary. Bad credit mortgage loan lenders want to protect their balance sheets from bad debt.
Stable Employment for Bad Credit Mortgage Refinancing Loans
A stable work history increases the likelihood of approval for subprime mortgage loans. Although times are hard, refinancing when in-between jobs, temporary work or a probationary period will not be possible. Bad credit mortgage loan lenders will only approve applications when a customer is well-placed to maintain the repayment schedule. Although there will be sufficient equity to cover the outstanding debt, foreclosure is both administratively time-consuming and bad for the lender’s reputation.