Low APR mortgage refinance lenders for people with bad credit

Lots of mortgage companies are hesitant to finance people with bad credit or only a little money as a downpayment. A "bad credit mortgage lender" helps people who have a low credit score, low income, or no money down.


A bad credit mortgage lender will help you get a loan approved faster than programs offered by credit unions or a traditional bank.  The downfall is that you may have higher fees or a higher interest rate.  The fees may come in the form of closing costs.
The first step is to begin comparing rates. Present rates are incredibly low, so even though you may be at a higher rate, by doing a little shopping around, you will find a good deal.

Things to avoid:

1. Any loan with a prepayment penalty for people with bad credit.
2. Any predatory lending
3. Any lending that has a variable APR.

One good tip is to simply wait and work to improve your credit score and then get a loan at a lower interest rate.  Some bad credit mortgage loans carry a pre-payment penalty, so make sure your loan doesn't have one. These bad credit mortgage loans have 6 months to 2-3 years pre-payment penalty. This means you have to pay huge sums of interest for at least 6 months before you can pay off the loan. If there is a pre-payment penalty you should take the loan that has the shortest term so that you can pay off the loan quickly without paying any penalty.

You may also want to consider these products.
Bad credit refinance loans
Bad credit home equity loans
Bad credit home purchase loans
Bad credit debt consolidation loans.

Myths about bad credit refinancing

There is a lot of bad information out there. If you have bad credit and are shopping around for a refinance or a mortgage you may run into some of this.  It is vital that you are educated because of this bad information.  I've had reputable bad credit mortgage lenders and refinancing specialists tell me some of this.  Here is the truth.

• Closing accounts - Your mortgage lender may tell you to close out some accoutns to improve your bad credit score in order to get you refinanced.  This is not true, the best option is to pay the balances down, not close them.
• Checking your FICO score will harm you - Again ordering a copy of your credit score does not harm you.  But applying for new credit does.
• Credit counseling will harm your score - This is just not true.
• The FICO does not matter - This score is what lenders base 75% iof their decision on.

5 Things to look for in a lender

In your search for a bad credit mortgage refinance here are 5 things to look for in a lender.  Avoid bad credit lenders who don't meet these requirements.

1. References - ask the lender for a list of people they recently did a mortgage refinance for that you can contact.  Then contact them!
2. Listening - Talk to the lender and be sure they understand your credit situation.  Many lenders who specialize in bad credit mortgages will be very interested in your exact situation and how they can help. Avoid a lender who doesnt' seem to care about your unique situation and just "pushes" a product at you.
3. Terms - Bad credit mortgage refinancing lenders are required to give you all the terms of the loan.  Ask them about fine print.  Ask tons of questions over and over.
4. Business History - Large numbers of bad credit refinancing lenders have come and gone.  Check their business history, how long have they been lending? How long have they been in this city/state?
5. Personal Contact - You will probably deal with a bad credit mortgage specialist.  This person will give you a business card and should follow up with you periodically through the process.  If you have trouble contacting this person you should look elsewhere.

Credit cards galore.

Credit cards might be responsible for getting you into your bad credit situation.  In my opinion they are a necessary evil.  So here's how to get a credit card even if you have bad credit.  First try your personal bank or credit union.  They already have your checking, savings, auto loan, and mortgage accounts, so they could be more willing to give you a credit card.  Also check with department stores like sears, dillards, etc. Make small purchases and pay them off completely when your bill comes.  Furniture stores will give credit to just about anyone, but be 100% sure you pay off your card before any promotional offers expire.  They make their money on people who carry even a one dollar balance after the promotional offer expires; they hit you with a late fee, and a huge interest penalty.  Lastly if you have no other options, have a friend or family member co-sign for you.  Even with bad credit you can get a credit card.