Home Refinancing with Poor Credit? Insights from a Mortgage Company in Waukesha, Wisconsin

You may be in the same boat as many other homeowners in Waukesha, Wisconsin: you bought your home when interest rates were much higher than what they currently are, and now you’re looking to refinance. However, the problem is, you have poor credit. Some homeowners assume that their poor credit would make refinancing at a lower interest rate impossible, or at least extremely unlikely. Well, that’s not always the case. Even if you have poor credit, there are ways to refinance your mortgage in Waukesha, Wisconsin. Let’s look at how you can do that.

Reasons to Refinance

First, you are on the right track if you are considering home refinancing in Waukesha, Wisconsin. As interest rates fluctuate over time, you may find yourself in situations where refinancing might easily shave 1%-2% off your mortgage interest rate, and even a 1% reduction in your interest rate could save you $50,000 or more over the life of a $250,000 mortgage.

You can also consider refinancing to reduce your mortgage term — that is, you can switch from a 30-year mortgage to a 15-year mortgage. It will certainly make the monthly payments higher, but you will be able to get your mortgage paid off and own full equity in your Waukesha home in much less time.

A word to the wise: Refinancing should never be done on a whim. Sure, it would be easy to just call a mortgage lender in Waukesha and begin the refinancing process right away. However, given the amount of money you could potentially save by finding a better refinancing deal, it is well worth your time to get it right.

Home Refinancing and Your Credit Score

Your credit score is the single most important factor in determining your refinance interest rate. Mortgage lenders in Waukesha use your credit score to assess how much of a risk you pose to them, and they adjust their interest rates accordingly. However, other considerations — such as your loan history with that lender and your current employment and income status — may also influence the interest rates you are offered.

Tips for Refinancing with Poor Credit

If you have a poor credit score but want to refinance your home in Waukesha, Wisconsin, here are three things to keep in mind:

1. Know your credit score: Before applying for mortgage refinancing, be sure to pull your credit score from all three major credit bureaus (Experian, TransUnion, and Equifax) since the score will vary from one to the other. Knowing your credit score before approaching lenders gives you additional leverage in negotiations.

2. Stay on top of current refinance rates: You must know whether current refinance rates are generally going up or down. While no one can time the market perfectly, you should only consider refinancing when interest rates are at least 0.5% to 1% lower than when you took out your current mortgage.

3. Watch out for points: When shopping around for rates, make sure to get quotes from at least five lenders so you can get the best price possible. Check to see if the lender is charging you “points” (basically a commission for the lender) in return for the lower interest rate.

Are You Looking for a Mortgage Company in Waukesha, Wisconsin?

Are you looking for an experienced and licensed mortgage company in Waukesha, Wisconsin? Look no further than the team at Compass Mortgage. We can help you with every aspect of refinancing your mortgage, even if you have less-than-ideal credit. Call us at (833) 638-7836 or contact us online to learn more about how we can help you make wise and informed choices regarding your mortgage refinancing.

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