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How To Be Approved For A Bad Credit Mortgage Refinance
By EchoBay Loans Staff Writer

Bad credit happens for a reason, and it's usually not entirely your fault. There's nothing more frustrating than needing to lower your house payment so that you can keep up with all of your bills, and not being able to do it because your credit isn't up to par with a lender's standards.

Some lenders barely get hello out of their mouths before asking you what your credit is like and the minute they find out about any blemishes, they run in the other direction as though bad credit were a contagious disease. The fact of the matter is, it's not impossible to refinance your home if you have less than perfect credit. You just need to know what to expect and how to go about it. Most importantly, you need to find a lender who's actually willing to work for you, not a lender who wants a clean and easy A-credit deal.

The first thing you need to realize is that even if your credit has a few dings, it's not going to stop you from refinancing your mortgage. A bad credit mortgage refinance is easily available through a lender that specializes in bad-credit loans. You should, however, expect to pay a premium for this service in the form of a higher interest rate. The worse your credit is, the higher that interest rate will be; which is why it's important to clean up your credit report before applying for any bad credit mortgage refinance.

To make sure that your credit report isn't telling lies about your financial health, you're going to want to get a copy of it to make sure that everything is accurate. Contact all three credit bureaus to get a recent copy of your report and look it over to make sure all of the information on the report is up to date and that only your information is appearing there.

If someone with the same name as you claimed bankruptcy and it inadvertently made its way onto your credit report under your name, that's not going to do anything to help your application process. If there are any errors on your report, get in contact with the credit reporting agency that is reporting the inaccurate information and ask them to remove it. It is their responsibility to investigate the matter and remove any inaccurate information from your credit report.

In addition to clearing up your credit report, you're going to want to pay off some of your outstanding debt while you're cleaning up your financial house. Pay down some of those credit card balances and make sure that you try to pay off any collection accounts. If you have any credit cards that are almost at their limit, pay those down first. You don't want to appear as though you're maxed out on any of your revolving credit accounts. A lower debt-to-income ratio will go a long way in getting you a lower interest rate when it comes to a bad credit mortgage refinance.

It may seem as though you're facing a mountain when you first think about refinancing your home and you know that your credit isn't the best. Just remember that lenders realize that everyone faces unforeseen circumstances at one time or another that can affect our credit ratings. In fact, very few people have perfect credit, so consider yourself to be in good company.

Lenders realize that your loan is being backed up with real estate; an appreciating asset. If the average lender isn't willing to take your loan, there are a number of lenders who specialize in bad credit mortgage refinance situations, and you can find a number of them online. Just find the one that's willing to work with you, and by following the above guidelines you should have few problems with the refinance process.

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