5 Ways to Refinance Your Home When Your Credit Is Shot

You might be only a couple of years away from paying your mortgage loan off completely or have many decades before you will own your property free and clear.

Obviously, you had to have had a decent credit rating in order to qualify for the purchase of a home, but there are many reasons that homeowners can fall on hard times and see their credit ratings plummet.

An illness can cause you to miss work and stop getting paid regularly, which might have negatively impacted all of your lines of credit. If you have been notified by the IRS that you owe a sizeable sum you may have had your bank accounts levied and all of your available money taken away.

Some homeowners suddenly have to start paying for childcare or need to reduce their hours at work because their children require more of their time.

At the end of the day, it will be harder to qualify for a refinance home mortgage with low-interest rates because creditors will only be looking at how responsible you are with paying your obligations. These next five ideas can help you to get your home mortgage refinanced without you having to wait years and years to rebuild your credit.

1. Have A Relative Co-Sign Your Refinance Mortgage

It can be incredibly hard to get someone to co-sign on a loan for you, especially in today’s financial market. Your own parents might not be willing to co-sign on a mortgage refinance loan for you, even if it means that you will be able to keep your house. You should still try to talk to your siblings, aunts, and uncles, or anyone else in your family that you trust about co-signing for you. Realize that anyone who you put on your mortgage note will also have a stake in your property.

2. Get A Higher Paying Job

If you are able to increase your yearly earnings, you can more easily get your home mortgage refinanced. The way that mortgage lenders look at things is this: either applicants have the ability to pay their mortgage notes or they don’t. Looking for interest rates can help, but if it won’t help you to get approved if the refinance company sees that you have many other monthly bills to pay. Increasing your income will enable refinance lenders to see that you have a good plan that will enable you to keep paying the mortgage note and that you won’t have to struggle to do it.

3. Get on Track with Your Monthly Mortgage Payments

A lot of homeowners start to consider refinancing their mortgages only after they have missed several payments. They could be in jeopardy of having their homes foreclosed on or are about to receive yet another delinquent notice from their mortgage holders. If you only have a couple of late mortgage payments on your credit report you can still likely get approved for a refinance. Get your mortgage payments current and then immediately look to refinance. It can take some time to get a decision made, so submit an application for a mortgage refinance when you know that your payment history looks positive.

4. Rehab Your Mortgage Instead Of Refinancing

Homeowners in various areas have the option of mortgage rehabs that can help them have late payment fees eliminated and build a repayment schedule that they can actually follow. If you are a senior citizen or fall in a low-income bracket, getting your mortgage rehabbed can save you from losing your home forever. First, talk to the company that holds your mortgage and learn if there are any rehab programs that someone like you could possibly qualify for quickly. Next, be sure to send in any information that is needed to get your application reviewed within a few days. Remember to follow up and then look at other rehab programs if you need to.

5. Increase the Equity You Have In Your Home

Refinancing a mortgage can be made much easier if there is equity that already exists in a home. Make improvements to your home yourself, like painting the shutters or manicuring your lawn. If you can get your home appraised for more than you purchased it for, it will be possible for you to borrow against that amount and get it refinanced.

Repairing your credit can help when you want to get bank approvals, but that process takes time. Creditors have to review your requests to have items dropped from your credit report and you have to submit information or payments in order to get your credit history updated. If you want to get a mortgage refinanced and you don’t have several months to improve your credit rating, try these tricks first.