How to Refinance With Bad Credit
Learning how to refinance with bad credit is necessary to obtain the best deal. Many may falsely assume that refinancing is not an option or that settling for high interest terms is a part of having bad credit, but this isn't always true. Numerous families and individuals refinance with bad credit without the hassle, inconvenience, or sky high interest rates by using a few simple concepts.
- SHOP AROUND. Even with bad credit, there may be several options for refinancing. Doing business with a lender that specializes in high risk loans may not always be the only option. Often, the local bank can offer a loan with modified options that can save the consumer considerably. Still, homework should be done. This includes investigating the business, checking reviews, and comparing rates.
- SPECIAL PROGRAMS. Those that fit eligibility criteria for various programs offered by the government may still be able to refinance with bad credit. Veterans and low income families are just a few categories. Checking with local social service agencies such as the Department of Housing and Urban Development and the Federal Housing Authority can be a good place to start.
- COLLATERAL. To refinance with bad credit, offering up some type of collateral can help seal the deal. The lender should keep in mind though, missing a payment can result in loss of personal property.
- COSIGNER. Refinancing with bad credit may be easier with a cosigner. Under certain circumstances, a spouse can even be eligible to serve as a cosigner.
- REEVALUATE. Sometimes, refinancing with bad credit can be as simple as raising the credit score, if only by a few points. Before applying for a line of credit or after being turned down, take necessary steps to increase credit ratings. This can be done by paying down balances, paying off a card or two, and making a few timely payments.