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From the Experts at

How to Refinance with Bad Credit

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illustration of family carrying house to show a refinance with bad credit

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Refinancing a loan involves paying your existing mortgage loan off and replacing it with a different loan. A refinance can net a different interest rate and term. A lower interest rate might lower your payments. A shorter term might let you pay the new loan off faster than the previous one, which means you end up paying less in the long run. Another benefit can be to switch from an adjustable rate mortgage (ARM) to a fixed-rate loan for a lower and/or more predictable interest rate or vice versa.

Qualifying to refinance—just like qualifying for a new mortgage—requires you get approved for the loan. Your creditworthiness affects your chances of approval and the interest rate you can qualify for. The better your credit, the better your chances of approval and of getting a good interest rate.

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    Qualifying to refinance with bad credit though, just like qualifying for a new mortgage with bad credit, isn’t impossible. There are available options even with their less-than-perfect credit.

    What Are My Options to Refinance with Bad Credit?

    The cut-off to qualify for a conventional fixed-rate home loan is roughly a 620 credit score. The cut-off for a Federal Housing Administration (FHA)-backed mortgage is as low as 580. The cut-off for refinancing is about 620—really considered a poor score and not bad, which is 600 or less. For a refinance additional factors to your credit score play into whether or not you may get approved. Some of these factors also affect a new mortgage, but others only apply or hold more weight in a refinance. These factors include:

    • The equity you have in your home
    • Your debt-to-income ratio or DTI
    • Your loan-to-value ratio or LTV—this is your mortgage divided by your home’s value after you refinance
    • How much cash you have in the bank, such as in a savings account
    • The type of mortgage you already have—conventional, FHA, VA, ARM or USDA

    The magic as to whether you can qualify to refinance is in the mix of these factors as follows.

    Minimum Credit Score Equity DTI LTV Cash in Hand
    700 Less than 25% 36%–45% 97% maximum* n/a
    680 Less than 25% Less than 36% 97% maximum* n/a
    640 More than 25% 36%–45% 97% maximum* 2–6 months
    620 More than 25% Less than 36% 97% maximum* 2–6 months

    When you LTV is greater than 80%, you’ll have to pay private mortgage insurance (PMI) too. An FHA Simple Refinance allows an LTV of up to 97.75%.

    When you refinance your home with poor or bad credit, you’re not going to qualify for the best terms and conditions. So, if you’re looking to refinance to get a lower interest rate and your credit is poor, want to calculate if a particular offer will put you in a better position than you’re in now—particularly if you’re looking into traditional refis.

    Here are a few of the major options available for people with poor and bad credit who want to refinance a home loan.

    Refinance an FHA Loan

    If you have an existing FHA loan, you have a few different options to refinance.

    The advantages of refinancing an FHA loan through an FHA program include more lenient qualifying guidelines than other mortgage refinance programs.

    With any FHA refinance option, you’ll want to have made your payments on time and in full for at least the last 12 months.

    FHA Streamline Refinance

    If you have an FHA loan and you made your payments on time for the last year, you may be able to refinance your loan to a lower rate—and lower monthly payments—with the FHA Streamline Refinance program. The program:

    • Doesn’t have to verify your income or check your credit
    • Requires less paperwork than some refinances
    • Has simple eligibility requirements
    • Doesn’t look at your DTI if you are in good standing with your current FHA loan
    • May not require an appraisal
    • Is limited to an amount no greater than your current loan’s original amount without an appraisal
    • Has no closing costs

    This program is a good option if the value of your home is about the same as it was when you first bought it or you plan to move soon and don’t want to pay closing costs on a refi.

    FHA Simple Refinance

    The FHA Simple Refinance lets you refinance your existing FHA loan into a new ARM or fixed-rate loan.  This option does require income verification, a credit check and a home appraisal. It’s a good option if you have some equity built up in your home, want to refi affordably and you want to pay a lower interest rate. This option is particularly valuable if you want to refi into a fixed-rate loan.

    FHA Cash-Out Refinance

    The FHA Cash-Out Refinance program is available to people with credit scores as low as 580. Some lenders may want a score of 600 or higher though. This program has a maximum LTV of 85%, so you won’t be able to qualify if you still own a lot on the home. You’ll need at least 15% equity.

    The FHA Cash-Out Refinance program is the only program of the three included here that lets you get cash of more than $500 on top of your refinance.

    To learn more about refinancing an FHA loan, you can contact any mortgage professional that offers these kinds of loans.

    VA and USDA Refinance Options

    Both the VA and USDA offer refinance options for existing VA and USDA loans.

    The VA offers two refinance programs. The Interest Rate Reduction Refinance Loan (IRRRL) program is available to vets that already have VA-backed home loans and is ideal for lowering your interest res. The VA Cash-Out Refinance program can be used with either a VA or conventional loan to use the home’s equity as collateral on a new loan to get cash in hand.

    To qualify for either VA refinance option, you need to have served on active military duty or have a credit score of 620 or higher.

    The USDA offers its own USDA Streamline-Assist Refinance and USDA Streamline Refinance programs.

    The USDA Streamline-Assist Refinance program is most similar to the FHA Streamline Refinance program. This program:

    • Doesn’t require a new appraisal
    • Doesn’t require a credit check
    • Doesn’t calculate your debt-to-income ratio
    • Is available if you have little or no equity in your home

    The USDA Streamline Refinance and Non-Streamline Refinance programs are similar to the FHA Streamline Refinance and VA IRRRL programs. To qualify, you have to be current on your USDA loan for the last six months, borrow no more than the original loan value and meet the USDA’s loan income and credit eligibility requirements. The Non-Streamline Refinance program requires an appraisal, the Streamline Refinance doesn’t.

    Other Options to Refinance with Poor or Bad Credit

    If you have a poor or bad credit score, you won’t get a traditional lender’s best terms and you may not even qualify. To qualify, you’ll have to meet the lender’s loan-to-value requirements even. Your home equity will likely need to be at least 20% equity. And your credit score will need to be no lower than 620.

    If you have a lower score, consider shopping around. Just be sure to vet any lender and its refinancing requirements carefully before filling out any applications—you don’t want to risk putting a hard inquiry on your credit that will further ding your credit score. Also consider:

    • Working with your current mortgage company. Since you’re a current customer, it may be more willing to work with you. And it may have its own version of streamlined refinancing or be willing to work with you on a different term or rate.
    • Approaching a credit union. Credit unions are sometimes more willing to help those with poor credit in order to secure a good relationship. If you’re not already a member, consider becoming a member before investigating a refi with the credit union.
    • Improving your credit score before you apply to refinance. Learn more below.

    What to Do Before You Refinance Your Mortgage

    There are a few things you should consider before you refinance your mortgage. If you have bad credit or a less than perfect credit score, it’s in your best interest to improve your credit before refinancing.

    To start, get your free Experian credit score on With your free score, you also get a free credit report card. Your report card shows you where you stand in each of the five areas that factor into your score along with ways to improve each area.

    Capture of dashboard to use to improve credit score

    The best things you can do in addition to checking your score and getting your free report care are to:

    • Check your payment history
    • Make 12 consecutive months of on-time payments for all your bills, including your utilities and phone bill.
    • Check your credit reports at if you haven’t done so in the last year and dispute any errors on your reports—this can boost your credit score, which will get you lower rates when you do refinance.

    Don’t Forget Closing Costs

    When you find a new refinance loan, consider that even if it offers a lower monthly mortgage payment, refinancing usually requires that you pay closing costs. Make sure you account for those costs and any repayment terms associated with your new home loan before signing on the dotted line.

    This article was last published November 16, 2016, and has since been updated by another author.

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      • Mark

        I’ve had my loan with Bank of America for several years, told recently qualify for HARP 2 Refinance program by loan officer with Bank of America. Loan officer indicated due to my bankruptcy in 2010, bank loan must be reaffirm. As the bank for whatever reason stop doing refinancing on loans which were not reaffirm after a Chapter 7 bankruptcy.

        Additionally mention, the bank changes policies all the time, they are not told why, can only follow the current policy in place. You would have really benefited from the HARP2 refinance program.

        Thereafter was mention, would have to reopen discharge bankruptcy case from 2010, an reaffirm loan, in order to do HARP 2 refinance. Sounds though the bank is defeating the purpose of assisting home owners in need of assistance by changing policy, not allowing a specific group of home owners the benefit of doing a refinance of home under the HARP 2 program.

        My understanding, isn’t this partially the reason HARP 2 program was put into place, assist those whom suffered from the economic down turn. I attempted to use another bank, was told can only do HARP 2 refinance with our current bank mortgage holders.

        • Gerri Detweiler

          If you are refinancing the loan with HARP2 that was included in your bankruptcy then you must reaffirm it in order to refinance it. But please talk with your bankruptcy attorney before you make such a major decision. if, in the future, you cannot keep up with the payments you may find yourself either on the hook or forced to file again.

        • ScottSheldonLoans


          You might want to check with a different lender other than Bank of America your servicer. If you are eligible for harp two, you should be able to move forward with Fannie Mae or Freddie Mac whichever entity owns your loan despite the previous bankruptcy from four years ago. It could be the Bank of America has what’s called an investor overlay- more layers of requirements on that program for a borrower with a previous chapter 7, so best to look around and get another lender’s opinion. You wouldn’t be be in California by any chance would you?:)

      • ScottSheldonLoans


        First place to go is to check with your servicer. If that is not an option you will need to provide some sort of way to support the mortgage via on paper income.

        • Terry

          I have a 440 credit score house paid for no loans and work full time snd tried to get equity loan and no one will even talk to me any ideas

      • Hockeyboy88

        Stop refinancing your mortgage and just pay a little extra on the principal every month and you end up paying off the loan sooner and with less interest.
        The banks hate when you think for yourself.

      • vr

        I am having trouble with a second mortgage company. First let me explain that my parents owned the house and had a first and second mortgage on it. The deed was in my name since 2003, both my parents passed away within six months of each other and I really had no time to process what was going to happen. I was able to put the first mortgage in my name but the second has been fighting with me. They even tried to foreclose on the house due to non-payment because I was told when my parents passed away by a representative of this mtg com that the loan was written off. My first mistake was to take their word for it. I was able to make up the payments but now if I am one day late they call me and harass me. They called me 9 times in one day. I have bad credit and can’t find away to pay them off? I don’t want to try and refinance because I am at 2% fixed. Any suggestions would be grateful.

        • Gerri Detweiler

          Are you living in the house? Can you afford to keep it? Is there any equity?

      • Jessica

        Hi. I am very confused on refinancing. I purchased my home 3 years ago through owner financing, due to poor credit. My home is worth more than when I purchased and of course I have paid a large amount of the balance. I will need to refinance this year as my owner financing ends next year. I only have a short term agreement for the owner financing and the agreement is I will refinance within the time frame agreed. My credit is slightly better than it was three years ago but it is still poor. Is there anyway I can refinance my home now that I have the equality with poor credit.

        • Credit Experts

          Jessica —
          You can call a lender to see what your options might be, but take care not to have an inquiry done for purposes of getting a loan unless you are relatively confident you will qualify, because a hard inquiry will cause a small, temporary drop in your score. A real estate agent may also be aware of special programs in your area that you might be able to qualify for. It never hurts to ask.

      • Kathy

        My husband and I would like to take out a loan on our home (it currently has no mortgage). We finalized a short sale a little of a year ago, then we were able to sell our small business and other properties and move out of state where we were able to purchase a home outright. We would like to withdrawal some of the equity for improvements and to consolidate a couple of other loans. How long are we going to have to wait for this to happen?

        • Credit Experts

          4 years for a conventional loan, 3 years for an FHA loan

      • Jimi

        My soon to be Ex and I own a house together. We moved out of it 3 years ago because we couldn’t afford it, but by chance a family has been renting it since we moved out and the loan is current. The “loan” is in my wife’s name only. (Because I had health issues in 2006, and no job, I hindered the loan application) The “deed” is in both our names. I have a steady job, bad credit, but now could afford the home, if I could refinance it. Would I apply for a new loan, since I’m not on the current loan? The loan is owned by Fanny, do I have a chance at HARP2?

        • Credit Experts

          From Scott Sheldon: If in the upcoming divorce settlement the property is 100 awarded to you then you should be able to refi with little hiccups so long as you give the settlement doc to the lender if that’s how they decide it should be structured. Alternatively, you should be able to refi it as a non owner , but the programs are limited to conventional not harp 2 (you would have had to have been on the loan at inception) with shoddy credit. If you were to move into the home as your primary residence your options increase with your credit score and history. This would probably be the best best. Key here is to be amicable with your ex if you are not already because they will need to sign off the deed to refi into your name which is why option one may be better. If you are amicable and they are willing to sign off, then give the tenant notice, physically move in and then refi.

      • Sunshine

        I need to refinance my mortgage. I am scared of a finding a non reputable company. My credit is poor. I have equity and I need to pay off debt. I recently came out of a chapter 13 bankruptcy and no one will talk to me. How can I find someone reputable to help me?

        • ScottSheldonLoans

          If you’re in California I can probably help you? Anyway assuming that you’re not, you could always look on line for review for lender in your area who could help or get a recommendation from family or friends. That’s usually how people tell me they find me. As for your Chapter 13 that’s going to be a big challenge in terms of a workaround. Most lenders want it least one year out of the chapter 13 to qualify.

      • ScottSheldonLoans

        The FHA unfortunately does not take too kindly to helping people refinance into a new FHA loan when they are behind on their current one. You say your credit score is shot. Shot like 500 shot? Or shot like 620 shot? If you are the refinance with the lender other than your current servicer collecting your mortgage payment you’re going to need at least 12 months out of no mortgage lates. I would recommend communicating directly with your servicer to see what they can do with your current mortgage since they hold the paper anyway and they are your best bet considering the credit obstacles. I hope this helps.

      • Gerri Detweiler

        My recommendation, Justin, is that you talk with a reputable credit counseling agency that also does housing counseling. They should have the expertise to look at your situation and explain which options are available to you. Here’s an article that may help explain what they do: Does Credit Counseling Work?

      • R Michael Maddox

        I am in similar situation. I have an 18 year mortgage on 2012 16×80 mobile home. 2 acres of land paid for. All was appraised at approx. $65,000. I owe $41,000 to 21st Mort. Co. Just for the Home. Payment and Ins. is $579.00 per month. I need to get a refi. with approx. $10,000 cash out to pay off all other debt. My score is 675-695 depending on which one you check. Equifax is the only one that still shows a CH.13 that will be 10 years out in June 20115. BTW I don’t have Prop. Tax due to being Disabled Veteran. I have not had a late payment on ANYTHING in 9.5 years. But I can’t find anyone to refi. my loan. Any Ideas??

        • R. MIchael Maddox

          I see none of these experts replied to my situation. I do need to make an adjustment. I had an NADAguides Value Report done this week. Adj Retail Value is $65,390. Their “Avg. Industry Adjustment To Base Book Value is $98,000 and change. Just did the math. If I could get either refi w/ cash out of $10,000, I could save myself $350.00 per month. Oh Well. Maybe something will come through.

      • Patricia Powers

        I own my home 2002 FTWD 06/03/2011 and 6lots 3 blocks with building on it I’m wonting to do some work that I won’t and trying to get a little money for the new work I won’t done do anyone have a plan for me to get money is Bank Loan the way to try or is there a home improvement plan to get better than that Can anyone help me find something that works better?

      • ScottSheldonLoans

        A new FHA loan on your primary home would probably be the least path of resistance scenario to pursue in reducing your debt payments. Usually, FHA loans will lend up to 85% on a primary home for cash out purposes.

      • valleywithoutabrain

        I am a veteran with a VA guaranteed loan. My current mortgage is at 6.96% and I have 17 years left on a 30 year. My balance is $72500 and the home value is @$135000. I would like to do a cash out refi, getting @ $11K over the balance owed to pay a back due bill and put a new roof on. My credit is the problem as depending on the source a lender uses I have a score that ranges from 560 to 641 depending on the source…what is my best course of action?

        • Chris Birk

          Thanks for writing and for your service to our country. Credit score benchmarks can vary by lender, but a 620 FICO is a pretty representative one for many VA lenders. You might start with a few lenders to get a clear sense of what your mortgage credit scores are like — it’s possible you already clear that hurdle. Let me know if you wind up falling short.

        • yo

          Don’t get cash out, but refi outta that ridiculous interest rate. Save $ over time for the roof.

      • Kim

        I have owned my home my home for 9 years. I am currently behind on payments due to losing my job of 10 years back in January. I have already used the HARP program in the past so from what I understand I cannot use it again. I am married, but my husband is not on the loan since we met after I bought the home by myself. He has never owned a home & is a veteran so he qualifies for a guaranteed VA loan. The mortgage is very close to going into foreclosure so I’m just wondering if he could use his VA loan to purchase the home from me, even though we’re married & have lived here together for about 8 years? His name is not on the mortgage or the deed. He does have a full time job & also receives a monthly disability check of $250 from the VA, but like myself, he does not have very good credit either. Also I need to mention that I do have some equity built up in the home. I’m just trying to figure out what our best option would be to bring the mortgage current & also possibly take out $5,000-$10,000 extra to pay off all other bills?? We have 2 small children, one of which was diagnosed with Autism at 2 yrs old (daughter) so I’ve decided to stay home with them for a couple years until the youngest (son) starts school so that I can work with & take care of my daughter, which is mostly non-verbal, but we are sinking fast financially! If we could either take out an equity loan on my mortgage, despite being behind on pymts & having bad credit, or if my husband could buy our home from me for a little more than what I owe, then would could pay off all extra debt & be able to live on one income for a while. Any advice or suggestions would be so greatly appreciated!!!

        • Chris Birk

          @Kim: Thanks for writing and to your husband for his service to our country. He could possibly look at a VA Cash-Out refinance, although he would need to meet a lender’s credit score requirement. Those can vary by lender, but a 620 FICO is a common benchmark.

      • Di

        We have a mortgage that has my parents and my husband and my name on it. We have less than perfect credit. We would like to lower our payments and get my parents names off the loan. We are currently behind on the loan. We live in Illinois. We were in a place where we could not get ahead. We need a fresh start on a clear mortgage. We were served a summons today.

        • Gerri Detweiler

          Have you talked with a consumer law attorney about your options? If not, I’d suggest that be your next step. Visit the website of the National Association of Consumer Advocates if you need help finding one in your area.

      • Eva spencer

        I am trying to find lender that can help me with refinancing my home at the $27,886.04. I was made an offer of $5000.00 to buy and be debt clear by the new lender, but I am retired and receiving a pension. This has been one bad ride because of the previous lender that added an escrow to make payments of $7,477.00 a month and then everything through the roof. Also reported an incorrect credit report that I requested by letter to be removed and they refuse. I need help and advice.

        • Gerri Detweiler

          I am sorry but I don’t quite understand your question, and we can’t recommend specific lenders.

      • Estree Ray Robinson

        Hello, we are currently struggling to pay our mortgage….currently barely avoiding 30-days late. I am about to go on maternity leave and would really need to refinance to lower our payments, but my husband and I have bad credit. Our home is worth about $850k and we owe $400k, so we have a lot of equity. Our current interest rate is 6%. Are there lenders out there that would refinance us? If so how do we find them? We do not have FHA loan, but if we could get one I’ve heard they are less strict.

      • Mike

        Please HELP! I was divorced 1 yr ago and awarded the opportunity to purchase my ex-wife’s share of the equity. I had tried hard to keep up minimum payments during the lengthy divorce, but eventually I could not pay our joint bills and my own. This resulted in ll of the credit accounts going into collections. After the divorce, I tried to refinance solely in my name. I qualified fine with income,
        but I couldn’t move ahead b/c we had joint credit card debt that the creditors saw fully as my own. We went back to court a few months ago
        and I bargained to pay off both my own and my ex-wife’s credit in exchange for the opportunity to purchase her share of the equity. Per the terms of the 2nd court settlement I paid off $20,000 in joint debt. (A mortgage co. told me that this would be enough to move fwd with my application: WRONG). My FICO score is currently stagnant at 585. I’ve
        been told that it will take 8-12 months for it to rise above 600. I’ve also been told that the minimum credit score to refinance conventional is 620 and FHA is 600. I simply need to get the loan into MY name for now. If I don’t the court insists that I place the home on the market for sale immediately. The current mortgage holder won’t issue a quit-claim. We refinanced through a HARP loan several years ago
        (currently with an APR of 2.0%), so I am ineligible to use HARP again! If I could simply get someone to refinance me into my own home, then I could refinance again down the road when my credit score improves. However, for now, I need to refi or list. Please help!!!

        • Chris Birk

          @Mike: Thanks for writing. I think you’ll likely need to keep working on your credit score and contacting lenders about their requirements, as credit score benchmarks can vary depending on the lender and the loan type. The average FICO score for an FHA refi in May was 683.

          • Mike

            “I simply need to get the loan into MY name for now. If I don’t the court insists that I place the home on the market for sale immediately.”

            Thanks for replying. Time is not a luxury that I have. There must be some sort of organization that refinance me..

            • Gerri Detweiler

              Have you tried talking with a local credit union or community bank? (You say you have equity but you don’t say how much so it’s a little hard to say.) Nevertheless if you have a shot at it, it seems like you need a lender willing to look beyond the score and hold the loan in it’s portfolio. You could also ask around to some local mortgage brokers and see if there is a hard money lender willing to take it on but the interest rates are very high with those loans. Hope you are able to find something that works for you.

              • Mike

                Hi Gerri – That’s EXACTLY what I need! I have 75k of equity in a 200k home. Thanks for the suggestion!!!

      • Leigh Luis

        Struggling and want out! My husband and I are currently in bankruptcy. We have a 1st and 2nd mortgage. I met with my realtor to put the house up for sale and have the payoff quotes from the lender. After all closing costs we will come out with only $200 plus dollars after owning the home for 10 years! The market is great in the area (Texas) but the house prices from block to block can vary as much as 50 – 70k. We need to get out with more money if we are going to sell. We are so house poor! Is there a way to refinance for a lower interest rate? Currently on the 1st, 7.5% and 2nd 9.85%. Ideally would like to combine 1st and 2nd loan for one low interest rate. Thank you.

        • Gerri Detweiler

          Have you talked with your bankruptcy attorney about not reaffirming the home loans and possibly doing a deed in lieu of foreclosure? I understand you’d like to get more money for it but you may want to talk with your attorney about cutting your losses. (I am not aware of lenders who will refinance a loan for a low rate while you are in bankruptcy but you could ask your attorney.)

      • tina

        I am wanting to purchase or refinance my parents’ estate mortgage but also need to pay out my brother. My credit scores are improving, but are still in lower 600’s. Does anyone know if this is possible for me to do a HARP loan? Or any kind of loan?

      • Jeff

        Help me break the cycle! I bought my house in 2001. In 2003 I did a second loan for $32k to pay off all my credit cards and credit accounts. I lost my job in 2006. Spent several years on a roller coaster with paying bills. Today I have a decent job of 3 years and so does my wife. We don’t have any credit except house and a car loan. I do have a daughter in college and pay her rent and some tuition, plus we have an 8 year old. The problem is our credit sucks because my 2 house payments suck up all my money each month. I am way overpaying on both home loans. My primary mortgage is at 7.75% and is $1580 per month PITI. My second mortgage is $600 per month interest only! I have literally paid the second mortgage company over $80k the past 12 years and still owe the same amount! I have tried several times to work something out with them and they won’t do anything. I only owe $132k on the primary and $32k on the second for a total of $164k. I had an appraisal done recently and my house is worth $245K. Because of my $2200 a month house payment, I am still robbing Peter to Pay Paul every month. Because I can’t save much money and it seems some event happens every other month that causes extra expenses ($550 for new alternator, $600 for new water heater…etc) I go 30 days late on the primary mortgage every few months. This cycle has been going on for years. At 4.5%, my mortgage payment on $165k should be $1100 PITI. All I want to do is refinance and it would save over $1100 per month. Is there any lender that would look at the fact that if I could refinance, I would not have ANY trouble paying any of my bills on time? This has been so frustrating!

        • Chris Birk

          @Jeff: Thanks for writing. It would depend in part on your credit score and probably your 12-month payment history. One mortgage late in the last 12 months could make it tough to land a refi even if you have qualifying credit, although policies can vary. Continuing to make that payment on time is key. A secured credit card might help on the credit-boosting front as well.

      • ick

        I have $1000,000 all due dec 2016 I have late payments on my credit report dating from late 2011 my credit scores are in the low 700 which is good, will I have a problem when I come to refi the one million which I have to do in late 2016?

        • Gerri Detweiler

          Your credit scores sound decent but they are just one piece of the puzzle. The lender is going to look at the property’s value and things like your income (if a personal loan) or financials (if commercial). It may make sense to meet with a trusted lender now to see what your options are so you can prepare accordingly.

      • ick

        Ps gerri I talked to you early last week about a foreclosue on my credit, well I disputed it and they deleted it took them one week.

      • Ann M Marin

        I am about to miss my first mortgage payment. Spouse started a new career that pays only commission, so income is irregular. We are in credit card debt and business debt, can not pay those either. Only steady income is my job which is stable but only nets 2K a month after health insurance, taxes, etc. Haven’t checked credit lately, but I know its in the toilet. Is there anything I can do to save my home? Is there any place that will refinance us? We have about 200K in equity, but repairs to the house need to be made before we can sell it.

        • Gerri Detweiler

          I can only imagine the stress this is causing you. Unfortunately it’s unlikely that a new lender is going to give you a loan without verifying that you have the income to repay it. I’d suggest you do two things:

          1. Talk with a HUD- approved housing counselor to see what suggestions they may be able to offer and

          2. Talk with a consumer bankruptcy attorney to find out what the process is in your state if you default on your mortgage.

          Both the counselor and the attorney can review your financial situation and help you figure out what your options may be. The first consult with the attorney is often free or at low cost.

      • Carmel

        My score is 585, 565, 575 I do not know why because I pay my debts on time. I was invited to refinance my mortgage by the mortgage company I have now. However I will be saving only 49 a month if I refinance for 25 years and only 119 month if I refinance for 30 years. I am skeptical about the offer because I have been paying my mortgage for 8 years and I have only 22 yrs left. Like everyone else I do not equity because in the market it is only worth 121000 and my balance is 136000. What should I do ? My interest rate is 4.875. Should I stay with what I have and do not refinance.

        • Credit Experts

          Carmel —
          Your first issue is to find out why your scores are so low. You can get a free credit report card from that shows which factors are helping (or hurting) your scores. You are wise to consider the additional length of your mortgage that will result from your savings. That said, if the mortgages you are being offered are the government loan modifications, it could be a good idea. You also need to consider your goals: Is it more important to you to get some positive equity or to have more wiggle room in your budget?

      • Carmel

        What is the best approach ? It is confusing.

        • Credit Experts

          Carmen —
          It varies with the person and goals. There’s really not a one-size-fits-all answer, which is why it is so complex.

      • HenryT

        I have a Mortgage that is at 9.9% (frback in the Countrywaide and escalating with other predatory lenders) and I owe around $66000 (underwater) and my Equifax score is 685 -is there any government program that can work for me . I am currently befind but need to free up cash as my home ( for now) needs a new roof ,painting,and windows. Is my only choice to walk away?

        • Gerri Detweiler

          Henry – Have you talked with a housing counselor yet? They can look at your entire financial situation and explain available options. If you haven’t talked with one yet, I’d recommend you do so. Find a HUD housing counselor here.

      • SJPB

        I have an FHA loan 4.93% fixed. My loan was with BOA last year when I was in the middle of a modification. That was last August. It got transferred to Carrington Mortgage Svcs.I a heck of a time trying to finish my mod. It was finally approved Feb 2015 my payments were supposed to start in April, but I was never notified of the approval or the new payment amount and date. May I get an intent to foreclose. I contacted CMS. Confirm my contact info, & am told I have to pay all 3 Mos or face Foreclosure. I request assistance again to see if I can start my payments in June and help to catch up on the 3 unknown payments I had. They resend paperwork. I send in. They are missing pay stubs and never call or mail anything to let me know. I call to find out the status and that’s when I’m told about missing info. August 14 I get called according to CMS. Never got the message. I called today to check status and am told I was denied. Because I was already approved for the mod in Feb or March that I don’t qualify. I don’t want to lose my home. But I don’t know what to do. They reviewed me for every alternative and didn’t qualify. I have a steady job, 7 years. My husband lost his job in May and took a job in June that pays him 1/2 of what he used to make. Our credit scores are in the upper 500’s. Is there a refinance or assistance program out there that can help? My three children have attended this school district since 2006. My eldest a senior, my middle one a freshman and the youngest a 6th grader. I don’t want to uproot them. Help!

        • Gerri Detweiler

          Have you met with an attorney yet? I’d suggest you meet with a consumer bankruptcy attorney who also handles foreclosure issues. It may be that filing Chapter 13 could allow you to keep your home and catch up. Or the attorney may have some other ideas for you. But since you are in imminent risk of foreclosure I do think you need to get legal advice. Visit the website of the National Association of Consumer Bankruptcy attorneys if you need help finding one.

      • Jennifer

        I own my home, which has a value of 75,000 and have the deed in my possession but due to my credit score being below 640 I am having problems finding a lender for a home equity loan. I am and have been
        gainfully employed. The purpose is to pay off approx. $10,000 in bills, in the hopes that I can better my credit. The scores that I have aquired
        are Equifax 623 and TransUnion 576. Is there a creditor out there that could help me? I understand with this type of score my percentage rate will be higher since I am considered a “risk”. Any information would be greatly appreciated.


        • Gerri Detweiler

          $10,000 is small for a home equity loan so that may me part of the problem. You may need to ask for a larger line. You only list two of your three credit scores. What is the other one? Most lenders use the middle score and if it’s in the ballpark of what you listed it will be difficult.

          You might want to try talking with a local credit union to see if they can work with you.

          If not you may want to look into credit counseling. It’s not true consolidation but it can have the same effect-lower interest and one monthly payment. Learn more here:
          6 Places to Get Free Help With Your Credit Problem

      • Mindi

        Hi! My husband and I have to refinance or sell our home. It’s court ordered. We really don’t want to sell. We have been denied a refinance loan by our CU. Scores are low 600’s. His is better than mine, My name is still on my ex’s home loan (he can’t re-finance either d/t bad credit) we have to refinance because my husband’s ex took us to court last year and that is what the judge ordered. We have beed working hard at cleaning up our credit. My daughter has gone to this school for her whole life, we really don’t want to move, couldn’t afford to even if we did. What do we do? Should my husband try to refinance in his name only? would that be better than putting me on the loan with him? My ex has missed house payments in last year, we don’t. That is what he CU said, that I had missed payments in the last year…. I did HA! Anyways…. any advice??? Thanks!

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