When do I start looking into refinancing? I have an ARM that expires in Jan. I have very bad credit.?

Question

I'm new to this and not sure how to reply to the answers. Thank you btw! Need to add but didnt have the room above - I"m on a repayment plan to avoid foreclosure. Not a pretty situation. I wish I could do more right now to clean up my credit but am taking baby steps right now. Just trying to get the ball rolling re: refinancing because I think I"m going to have a hard time finding someone to refinance me. Thank you.

Answer 1

Can't add a thing to bdancers answer.

Answer 2

You need to be looking now. At the very least, you should be working on cleaning up your credit so that you have a chance at getting a new mortgage.

If you are carrying credit card balances, pay those off. Carrying balances that are more than 30% of your limit, hurts your score. Paying credit cards in full every month is much better.

You should also get a copy of your credit report (AnnualCreditReport.com) and start negotiating settlement of any bad debt. Start with the newest and work back to the oldest. You can negotiate settlement of 50% to 75%. Lump sum gets the best deals. Payment plans have to be short term. Get any settlement arrangements in writing before you pay and don't allow them access to your bank account. You can ask that the negative be deleted for payment -- some will, some won't.

Any mortgage company is going to require you clean up any negatives on your credit report anyway. At least doing it now might improve your score and allow you to qualify for a new loan.

Answer 3

You're going to have a hard time finding a refi with bad credit and a declining real estate market. If you put little or no down when you purchased, you may now owe more than the current market value of the house.

Answer 4

look into FHA....you cant have any credit lates in the last 12months...but you can have a low score of like 400.

look for a loan officer that offers free credit repair info