BAD CREDIT MORTGAGES

With very few exceptions, one of the first things a potential lender will ask you for when you apply for a mortgage loan is your permission to run a credit check.

If you have some concerns about your credit history and rating, you might want to think about what some people call a “no credit check mortgage.” There are lenders that specialize in helping people with bad credit purchase homes and acquire financing at a reasonable interest rate.

Do Mortgage Lenders Always Perform a Credit Check?

If your credit is less than stellar, you probably already know that you will have a difficult time getting the best interest rates on a mortgage refinance. Here are a few things you should know about applying for bad credit mortgage refinancing.

First, your interest rates will typically be much higher than a person with a credit score of 680 or above. However, you should shop around and see what is available to you; depending on the current interest rate, you might be able to find some type of financing with a better rate than what you currently have. Investigate several lenders for the best rate. If you are a member of a credit union or can qualify to become one, be sure to check their rates because they tend to have better options for people looking for bad credit refinancing.

If you have filed a Chapter 13 or Chapter 7 bankruptcy, the bad news is that this filing will remain on your record for seven to 10 years. However, if you are a homeowner, the good news is that this does not necessarily mean you will be unable to refinance your mortgage for that entire time. It is possible to refinance your mortgage within a year or two after declaring bankruptcy. You can figure out the potential savings with a mortgage payment calculator. The offers will likely get better as you get further and further away from your bankruptcy, but there are other factors which will improve your chances of getting your refinancing loan approved, and getting the best interest rate.

One factor which lenders will look at when you are refinancing your home is the amount of equity you have in your home. If the purpose of your refinance is to get a better interest rate, and you are not attempting to access your home equity with a cash-out refinance, lenders will tend to look upon you as a better risk. They will see the bankruptcy in your past, but they will also be looking at the Loan to Value Ratio of your house.


Loan to Value Ratio