Can I Get A New Mortgage If My Bad Credit Is Now Good?
Having a bad credit mortgage is more costly than a conventional mortgage. Even with the best rates available, you are still paying higher interest if you have a high risk mortgage. If you have improved your credit to a good or better rating, it is time to refinance your mortgage. The only thing that may prevent this is if you have a time limit before refinancing on your current mortgage. High risk lenders often place a two year minimum on a bad credit mortgage to ensure that they make some money off of the transaction. They realize when they make the loan that you will eventually improve your credit and want to refinance at a lower rate.
How Do I Know If My Bad Credit Is Gone And If I Am Able To Refinance?
When you get a bad credit mortgage you will automatically boost your credit score. Credit reporting agencies instantly raise scores for people that have a mortgage. When this happens you should take advantage of the opportunity to erase all the rest of your bad credit. Request a copy of each of your credit reports and review them carefully. Nearly 80% of all credit reports have one or more errors listed on them. Once you have disputed all the incorrect information, work towards cleaning up the remaining accounts. You will have about two years until you can refinance. This is the perfect time to clean up your bad credit.
Is There Anything Else I Can Do TO Clean My Credit And Get A New Mortgage?
Timely payments account for 30% of your credit score. Make sure that you always pay your bills on time and you will see your score improve. Scheduling automatic payments is one way to guarantee that the payments are made on time. However, if you do electronic payments always schedule them at least two days before the due date to make sure that there is no lag in processing.
*Affects pricing. With the No Closing Cost
Option, borrowers finance the closing costs instead of paying for them at
closing. Borrowers who pay closing costs at closing may qualify for a lower
interest rate. Some upfront fees (ex. credit report and appraisal) may apply
and may be credited at closing.
*Refinancing or taking out a home equity loan or line of credit may increase
the total number of monthly payments and the total amount paid when compared to
your current situation.
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