How to Refinance With Poor Credit to Prevent Foreclosure in Connecticut
Connecticut homeowners facing foreclosure should explore all options to save their home. One common option is refinancing the loan at a lower interest rate. The lower rate will typically lower the payment, making it more affordable. Unfortunately, when you fall behind on your mortgage, it begins to impact your credit. Your credit score is typically a factor in the interest rate you are offered by the lender. Although the process may not be as simple, refinancing options are available for Connecticut homeowners with poor credit.
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Instructions
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Contact your lender. Discuss refinancing the loan with your lender. Your credit score may not be as bad as you think. The lender can review your loan and check your credit to see if you qualify to refinance. Some Connecticut lenders require homeowners to be current on the loan before they can refinance. You can also consider a co-signer if your credit is too low for approval.
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Refinance with an FHA loan. An FHA loan is typically more lenient than a conventional loan when it comes to credit scores. Your score can be as low as 620 to qualify for an FHA refinance. You cannot owe more than the home is worth to qualify for an FHA refinance. You can ask your lender or other lenders of your choice to determine your eligibility for an FHA loan. You will need to supply recent pay stubs and bank statements. An appraisal is also required. For help locating an FHA lender near you, visit HUD for a lender list.
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Call a housing counselor. HUD-approved foreclosure prevention counselors can review your loan details and financial information to explore possible options for refinancing your Connecticut home. The Making Home Affordable program allows Connecticut homeowners with less-than-perfect credit to refinance the loan. Through the loan modification program, the interest rate is lowered and the loan terms are extended to reduce the payment.
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Apply for assistance through the CT FAMLIES Program. The mortgage refinance assistance program helps Connecticut homeowners refinance into a fixed rate, 30-year mortgage. Most types of mortgages are eligible for the program, including interest-only and adjustable-rate mortgages. Even if you owe more money than the home is worth, you can still qualify for the program. Call 860-571-3500 for more information about the program.
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