How Do You Refinance a Mortgage With Bad Credit?

How Do You Refinance a Mortgage With Bad Credit?

Refinance a mortgage by fixing errors on your credit report and making the application packet look as attractive as possible. Be prepared to prove income, savings, and any raises to occur later in the year. Moreover, it is recommended to have the home appraised again.

  1. Fix errors on your credit report

    Order a copy of your credit report and review it completely for errors. If any are found, contact the credit agency and begin the process to have the issues resolved.

  2. Prove your employment

    Gather together tax documents and other documents that prove how long you have been gainfully employed.

  3. Prove an upcoming raise

    Ask your boss for a letter detailing any raise that's coming up within the next year. Ask them to write down how much the raise is going to be and when you can expect to see it on your pay check.

  4. Prove any savings you have

    Be prepared to show the lender how much money you have in savings, retirement funds or other accounts. Lenders are more likely to approve a refinance when the borrower has a cash reserve.

  5. Prove the equity

    Have your home appraised to prove that you have equity in the property. This is important, because some types of loans, other than an FHA loan, require that there is some equity in the home.