Copyright © 2009 - Mortgage Refinancing - is proudly powered by WordPress | Log in
Compositio Theme is created by: Design Disease brought to you by PremiumThemes.com
Refinancing Home Mortgage
In: Mortgage Lenders
19 May 2010I am buying a house with my husband but our credit is less than stellar. We were approved for a loan but with a nominally high (6.75) interest rate and the monthly payment is doable but will have us paying more than 3 times the value of the home over the course of the mortgage. Our credit is at such a state that it will be repaired in about a year or two and we will be back to the excellent credit scores we had before my husband lost his job. What exactly is refinancing? Does it involve a lender paying back the entire principal of the loan and clearing our name with the current lender, and then relending us the money with more attractive numbers? If so, what are the chances of us being able to do that? How does it work?
This is about mortgage information questions.
Copyright © 2009 - Mortgage Refinancing - is proudly powered by WordPress | Log in
Compositio Theme is created by: Design Disease brought to you by PremiumThemes.com
2 Responses to Bad credit to good credit, home refinance?
godged
May 19th, 2010 at 4:18 am
Make sure that your current loan doesn’t have any pre-payment penalties that you will have to pay if you refinance in a year or two. Some loans have pre-payment penalties out for years, and hefty penalties if you are refinancing.
With that being said, you have the right idea on refinance. When you refinance, the new lender will pay the old lender the balance. But when you refinance, you incur closing costs again, appraisal fees, etc., etc. – so don’t make a hobby out of refinancing your house.
Chances are great that if you continue to work on your credit, you can refinance down the road.
Jimmy John
May 19th, 2010 at 5:01 am
You wrote
“Does it involve a lender paying back the entire principal of the loan and clearing our name with the current lender, and then relending us the money with more attractive numbers?”
Yes, it may work that way.
If your credit score goes up AND interest rates are stable or goes down, you should be able to get a good offer in a year.