Can I Qualify For FHA Streamline Refinance Loan with Bad Credit?
Many people wonder whether or not they can qualify for FHA streamline refinance loan with bad credit? The current world of refinancing for home mortgages is in a very different place than it was during the boom of home refinances which occurred between 2003 and 2007. In the past, the borrower with FICO scores that may be as low as 500 could get refinance rates that were much more competitive.
Sub-Prime Lenders
Subprime lenders were set up just to provide mortgage refinances for people with poor credit ratings. These lenders relied heavily on the assumption of home values increasing by five percent per year. However, those lenders were found to be incorrect in this assumption. This makes it tough for people with bad credit. Where should they go? The ultimate solution for these people might be to get an FHA to streamline refinance home loans.
Required Credit Scores
What is the credit score that must be possessed to be eligible for this sort of loan? In many cases, it is required for people to have minimum scores of around 580. The FHA program of refinancing is not driven by scoring. However, the lenders require the borrower to have a FICA score of 580. Although, the fact that a potential borrower may have a score between 500 and 579 may not be a total deal-breaker. These homeowners can work with credit repair companies. It is common for credit repair companies to increase credit scores drastically over very short periods of time.
FHA Mortgages
FHA mortgages have low rates, even for people who have bad credit. There are a variety of lenders who will work with people who have bad credit. It is worth checking out FHA refinances. Many people who think their bad credit is too are quite surprised by the deals they can find. Bad credit is not the end of the world.
