If you have bad credit and are looking to refinance your mortgage, there are several options available to you. One of the most popular is the FHA Simplified Refinancing Program. This program allows you to refinance an FHA loan without undergoing regular credit and income checks. In some cases, you may even be able to refinance without needing an appraisal. If you have an FHA loan, you may already know that you must pay a mortgage insurance premium (MIP) if you put down less than 10% on the home.
Many homeowners hold onto their FHA loans until they reach 20% equity, and then refinance with a conventional loan in order to get rid of the MIP requirement and save money. In order to improve your credit score, it's important to keep your utilization rate at or below 30%. For the greatest increase in your score, try to keep it below 10%. Carrying more cash with you, paying charges immediately, and budgeting money are all simple ways to reduce your utilization rate. Adding a non-occupying co-customer to your loan can also help, as the lender will consider both of your qualifications when reviewing your application. You can also opt for simplified FHA refinancing, which allows you to refinance your rate or term without needing a credit check if you currently have an FHA loan.
Rocket Mortgage is one lender that offers this option. Finally, consider government-backed refinancing programs such as FHA loans, which have lower credit rating requirements than conventional loans. Refinancing homes with bad credit is simply the refinancing of homes by a lender who works with high-risk borrowers.