Many homeowners become immobilized by fear and think they can't qualify for a loan because of bad credit. The truth is that life happens--emergency medical bills may have begun the cycle of bad credit for you--but there are things you can do to improve your bad credit and refinance your loan.
The important thing to keep in mind with bad credit is that lenders want to make you a loan--you just have to find the right kinds of lenders that can work with people with poor credit. You can't sit around and wait for your credit to magically improve, or hope that time will cure all ills--you need to take action. If you want to make home improvements, don't let your bad credit prevent you from applying for a mortgage refinance.
The First Step to Improve Your Bad Credit
The first thing you can do towards your goal of a mortgage refinance, and forgive me if this seems obvious, is to find out exactly how bad your credit really is and why. Go online to one of the credit agencies and get a free credit report. Check your report thoroughly for accuracy. There are countless cases of people who found and disputed mistakes on their reports, making significant headway on improving their bad credit.
Pay Off What You Can
Any small debts you have you should pay. The little amounts can really add up, but they are also one of the easiest places to start in improving your credit. Try to pay your credit card bills down to less than half of the card's limit. This helps prove to lenders that you are not already over-extended.
Take ActionBy making these small strides to improve your situation, you'll be better able to qualify for the loan for which you've been looking. Bad credit will not totally prevent you from qualifying for a mortgage refinance. If you want to refinance your mortgage but have bad credit, the worst thing you can do is nothing.