Refinancing With Under 500 Credit Score
Mortgage Wizards Inc. Can Help With "Bad Credit Mortgage" Refinancing
If you've got a credit score less than 500, getting a mortgage refinancing loan could be a bit difficult, if not totally impossible.
Yet, a sub-500 credit score does not necessarily mean "bad credit" although more often than not that's how it is referred to.
Even if you made all your payments on time in the past, if your payments were not reported to the three top credit rating agencies ( Experian, Trans Union, and Equifax), it may look like you have "no credit." And that, in turn, sometimes end up translating to a sub-500 credit score.
But we at Mortgage Wizards Inc. can make your refinancing dreams come true and arrange the best "subprime loan" available for you. These are the loans that come with a higher-than-normal interest rate and substantial prepayment penalties to compensate for the perceived risk involved. These loans are generally short-term, from 6 to 12 months, and meant solely to raise your credit score above 500 and pay off your debt.
So what is a "credit score," really?
A Credit Score is a number that varies between 350 (minimum) and 850 (perfect credit). A credit score below 620 usually spells trouble for the borrowers.
Also known as a "FICO store," the current formula for a "credit score" -- which is used by all major credit agencies to gauge a borrower's "credit worthiness" -- was invented by Fair Isaacs and Co. of California.
The exact formula itself remains a trade secret but many industry observers agree that it incorporates about 45 different variables. Your most recent credit payment history is probably the single most important factor, responsible for a whopping 35% of the credit score.
Thus even if you had excellent payment history in the past, if you have neglected to pay your credit debts anytime within the last year or two, that would lower your FICO credit score more than any other factor.
So, you may ask, how come we can help those clients with sub-500 credit scores?
As you can easily appreciate, the greater the risk that a loan might not be paid back, higher will be the interest rate and the charges involved. This is a general law of financing that, like the law of gravity, is at work 24 hours a day in all countries across the world.
Since a sub-500 credit score implies a "high risk" borrower, certain "guarantees" are sought to make sure that the "bad credit mortgage refinancing" loan will be paid back.
Having sufficient equity in your home certainly helps. "Equity" is the difference between the current market value of your property as determined by a current home appraisal, and the mortgage debt on it. Our programs use asset-based underwriting to determine whether you will qualify for a bad credit mortgage refinance. So, if your home has equity you will be in a better position to obtain such a loan regardless of your payment history.
Since loan companies assume that customers with sub-500 credit scores have more difficulty in paying back their loans, the ratio of the monthly payments to monthly income is another factor in play. The higher your monthly income is with respect to your monthly payments, the chances are we'll be able to find a "bad credit mortgage refinancing" loan for you.
If there are any credit cards that you have obtained in the past but are not using right now, we strongly advise using them and paying them off quickly since "credit utilization" is another factor that would help increase your "credit score."
One thing you should be careful about while improving your credit score is applying for too many credit cards at once. Since multiple credit card inquiries within a short period of time is looked upon as a sign that the applicant is having difficulty with paying his or her debt with the existing credit cards, it usually works as a negative and may even lower your credit score further.
Please Call us TODAY at (877) 310-FUND for a confidential consultation on how we can help you get the mortgage refinancing loan that you need and deserve even if you have a credit score under 500. We'd be happy to place all our experience and resources at your command.
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