People refinance their homes for various reasons, but often as an effort to reduce monthly mortgage payments and lock in a lower interest rate. A central determining factor on home refinancing approval depends on the applicants credit score. Mortgage companies tend to favor good credit scores, making refinancing with a poor credit score typically very difficult.
However, if you have poor credit, this doesn’t necessarily mean you can’t refinance your home. There are some ways poor credit holders can still get approved and here are our top suggestions on how to refinance with poor credit:
1. Consult with Your Mortgage Company
Mortgage refinancing with poor credit is a challenge, but it may be possible if you consult with your mortgage company and explain your financial situation. If your poor credit score is the result of a sudden, unexpected financial emergency and you can provide proof of that, then it’ll tremendously help improve your chances of getting approved for the refinance.
Likewise, if you’re taking active steps to then you should also provide documentation to demonstrate this, as it shows the lender that you’re doing everything you can to clean up your financial issues. Generally speaking, mortgage companies are much more likely to provide home refinance with poor credit holders if they believe that your credit issues are temporary and that you’ll be able to make monthly refinanced mortgage payments on time. If you can prove both of these, you’ll have a better chance of receiving approval.
2. Take Out a Small Loan
A great way to boost your credit score is to take out an installment loan. Paying off a loan in full reflects excellently on your credit score, as it demonstrates financial responsibility and the ability to manage debt successfully. To boost your score fast, consider getting a title loan. A title loan lends you a cash sum based on the value of your vehicle and temporarily takes hold of your vehicle’s title (pink slip). Once repaid in full the title is returned into your name and your credit score should gain a noticeable boost.
3. Stop Making Credit Card Charges
Your credit score will only worsen if you continue to make credit card charges without paying off your credit card debt first. Home refinancing with a poor credit score is doable but is less likely to happen if your credit score is utterly dismal. Take direct steps to improve your score by stopping all charges to your credit card and gradually pay off your debt. Living off your debit card likely won’t be easy, but worth it if it means an improved credit score and your home refinance request approved, also you can find other options online to help you with this.
4. Raise Money
You may be able to avoid mortgage refinance with poor credit all together by raising enough money to pay off your credit debts. This way you’ll be able to apply to refinance your home either with a significantly improved or even “good” credit score – which should allow for a better deal. Try to think of realistic ways you can raise money fast, and this could provide you with the cash you need to pay off your debts and restore your credit score fast.
5. Use a Specialist Company
There are refinancing and home loan companies out there that specialize in home refinance for poor credit holders. These companies are often very willing to approve poor credit holders, meaning you could get your home refinanced easily by going down this route. However, it’s important to note that these specialist poor credit home refinance companies typically charge greater interest rates and thus may not provide as great a deal as if you simply worked toward improving your credit score and then applied for home refinance with a traditional home refinance company.
Car Capital Financial
If you’re struggling financially, are considering refinancing your home or fear you’ll lose it to foreclosure – consider a title loan from Car Capital Financial first.
We deliver the money you need fast and have been providing loans to Southern Californian residents in financial need for over 15 years. Title loans are issued based on your ability to repay the loan.
Get your title loan today by calling 1-888-500-9887!