Refinance your Mortgage, even with low FICO score and lower your monthly payments

The global economy has changed over the last year, and it is reflected mainly in the market of mortgage loans. Many properties reduce their prices so much that the mortgage loans are more expensive to houses themselves. There is also another problem: your credit score. Many people had lost their job and not be able to pay their loans on time. These made credit scores go plummeted and the large portion of people trying to refinance a mortgage as a very poor credit score.

The Fair Isaac co., invented the FICO Scoring system, which is the most widely used by banks and lenders; This ranges from 300 up to 850.

Although each institution has its own credit report requirements 500-520: generally, is the minimum score required to qualify for a mortgage.

FICO credit score is generally like this:

A random number from 760 to 850 = large credit report
A random number from 620 to 760 = good report
A random number from 500 to 620 = will depend on the institution
Any number less than 500 = bad credit report

Banks are very cautious and ask for a credit report over 760 for a mortgage loans rescheduling, but high risk lenders appeared in the market thanks to these situations.

High risk lenders can give you a mortgage refinancing with credit report s as low as 500, although some lenders may require a minimum or at least 620 and, as we said before, banks requirements are higher: 760 or more.

All the credit bureaus and institutions, the lender will use the same formula to reach their credit scores numbers, many can use a different name for it, but the most important is the formula that connects all of your credit history. This number shall consist of individual ratings in five categories:
1-Payment history (35% of the credit rating)
2 Length of credit history (15%)
3 New credit (10%)
4 types of credit used (10%)
5 Debt (30%)

As you can see, your income is not a factor; however, your score may vary between lenders, because each has different information in the file.

Scores are important, but they are not the only lenders take into consideration when approving the mortgage. And low scores, are not insurmountable obstacles

Many people with bad credit to try to get a credit repair first. But this credit score is a report of your previous financial results, not your current debt load. So, it can be useful if you wait until your current becomes your earlier.

Refinancing your mortgage, if you have bad credit score can help you, because you want to solve your current loan a get a new one; it is like a fresh start: with mortgage loans refinancing you will also be able to repay your loan faster under better conditions.

For people bad credit mortgage refinancing is a useful way to reduce the monthly payments and can help to save some money.