Thought Lower Credit Scores Would Prevent You From Refinancing? Well, Think Again!

Most consumers are under the impression that if their credit score is not above 740 that they cannot qualify for today’s low interest rates. Nothing could be farther from the truth. When you understand how the pricing works with Fannie Mae and Freddie Mac loans you will be able to take full advantage of today’s still attractive mortgage rates.

If your score is 620 and you are only borrowing up to 60% of the equity in your home there is very low pricing adjustments on a 30 year fixed rate mortgage of $417,000 or less. Believe it or not, that goes for both rate & term refinance as well as CASH-OUT!

The better news is that if  your score is 620 and you do need to borrower more than 60% of your homes equity but not more than 75% and you can afford a 15 year fixed, you will get the same rate as someone with an 800 score on a rate & term refinance. If you can afford a 15 year fixed and you need cash-out there is a small adjustment up 60% of equity and a bit larger one to 75% but, still much less than the 30, 25 or 20 year fixed.

If you need to 80% of equity for rate & term or a cash-out refinance with a 620 – 660 credit score then, the best option is a portfolio lender as they make there own rules. If you show strong assets such as stock, bonds, or CD’s and you have an excellent mortgage history they will approve the loan.

Let an experienced mortgage professional review your specific situation to best determine which course of action to take. Yes, obtaining a mortgage has definitely become more difficult then in past recent years but, proper guidance to help navigate all of today’s option will certainly increase your chances of hearing the words, “your approved!”.