With mortgage rates still relatively low, even homeowners with bad credit stand to benefit from refinancing. If you want to take advantage of this opportunity, you'll need to know how to get the right loan refinance in the least amount of time. Here's how to get your loan file to the top of the lender's stack.
1- Know how refinancing fits into your financial goals. This is the single most important factor in getting the refinance that's best for you. Do you want to get cash for home improvements? Do you want to replace your bad credit mortgage with a traditional refinance, landing a better rate?
2 - Have all the paperwork ready to go. Make sure you make the most of that coveted loan appointment by arriving with bank statements, pay stubs, tax returns, even hazard insurance documents.
3 - Do the Math. How long will it take to recoup the closing costs of the refinance from your monthly savings? Determine when you will break even, and only refinance if you know you'll stay in the house at least that long.
4 - Know thy credit. There are plenty of refinancing options for good and bad credit borrowers alike, but not everyone will qualify for the rock-bottom rate advertised. Set your expectations by reviewing your credit report.
5 - Include a savings cushion. Save some of that cash-out refinance for a rainy day. Roof repairs, pest control, you never know what household expenses will come up.
6 - Lock rates for as long as possible. In today's booming refinance market, it can take sixty days to close. Lock in low rates for at least that time, if not longer.
7 - Ask for regular progress reports. Get a timeline from your lender, and then follow up to make sure the ball keeps rolling.
Bad credit or good, everyone stands to benefit from today's low-interest mortgage refinance market. If you arrive with a solid game plan, you can be sure you walk away with the mortgage refinance that's best for you.