Refinancing with bad credit can be doable, but you will be paying a much higher interest rate. It will help to have a lot of equity in your home or have a big chunk of the loan paid off already to enable your payments to lower if you have bad credit since bad credit equals a higher interest rate. If you have a lot of equity in your home, or you have a large chunk of your mortgage paid off already, you may also be able to combine two mortgage loans into one, thus eliminating the high interest on the second mortgage, even if you do have bad credit. You can also try extending the term of your loan long enough that your payments can lower, even with the higher interest rate on bad credit.
Even if you can get your payments lowered on bad credit, it is always ideal, if you can, to take the time and try to fix your credit as much as you can before refinancing. The most sure way to fix your credit is to make your required payments on time and your credit will start improving accordingly. It is therefore important to check your credit regularly to ensure your credit is where you need it to be and you can mark your progress to ensure you are doing everything right. You can check your credit on-line either for free of charge, or for very little (a dollar or two) depending on the website. A credit score of around 678 or above is considered good since around 678-720 is considered average. The higher your credit score, the better your credit. Once you hit around 850, you really will not be able to go higher and have it make any difference.
Although it is possible to refinance with bad credit (and you may even be able to achieve your goal), it is always better, if you can, to try to improve your credit as much as possible. The better your credit, the lower of an interest rate you will be able to get. A lower interest rate not only saves you money, but will allow you to afford more as well. Your payments will be smaller and therefore, it will be much easier to maintain good credit!
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