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Low credit but need to refinance

I have a 592 credit score with about $12K in credit card debt and a few late payments from two years ago. (lost my job) My parents said they're willing to loan me the $12K to pay off my credit cards in full. Would this increase my chances of getting a refinance loan? I'm currently privately financed at 10%. I owe $140K on a house that is worth about $225K. Any help is greatly appreciated

by samuel.w944 from Rodney, Michigan. Sep 16th 2015 Reply


SamuelTo answer your question, yes it should generally help. You will need to make sure to pay your debts strategically to help your overall debt utilization. I would recommend making sure all your debt are at least below 10% balance to limits, both individually and cumulatively. Rob Miller Senior Mortgage Loan Officer

Sep 16th 2015
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If you pay off your $12,000 of credit card that this well bring your credit score up to a level where you should be able to obtain financing. Our minimum fico score is 620.Be sure not to close the accounts after you pay them off.if you need more help please contact me at 517-489-2440

Sep 16th 2015
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Greg Mitchell (GregMitchell)
#107 ranked lender in Illinois - 17 contributions

Hi Samuel,I might, let me send out an email in the morning and get back to you. Greg

Sep 16th 2015
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Jack Cyrul (Jack Cyrul)
#5 ranked lender in Michigan - 90 contributions

We have lenders that will work with the 592 credit score. Feel free to contact me for a free pre-qualification. Jack 734-395-9025

Sep 17th 2015
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Jesse Stroup (jessestroup)
#195 ranked lender in California - 589 contributions

Some investors will allow a 592 credit score, this will be with FHA financing. As most investors that offer conventional loans require a higher credit score to refinance. You can look at an FHA cash out refinance to pay off the past debts. Some of the main things to look at are the credit scores, past credit history and the debt to income ratios (DTI). If your DTI's ratios are to high you can look at other options to paying off the credit card debts out side of the loan or look into gift funds from your parents. It looks like you have plenty of equity in the home so you have low Loan to Value ratios on your side, and other then me being able to see the a mortgage app and a full credit report it looks like you may have a great case to move forward on a FHA cash out refinance. Jesse Stroup Mortgage Professional www.CaliforniaHomeLoanLender.comNMLS# 6229

Sep 17th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,797 contributions

More info is needed to answer your question, and it's nearly impossible to say for sure without looking at your complete loan profile.. but in general, most lenders doing FHA will want to see a 620 or higher credit score, with a handful going down to 600, 580 or even down to 500, but understand that the lower the score the more strict the underwriting guidelines are, and few that apply actually get approved.. Also, lenders look at the MID score on a TRI-Merge credit report.. so we would need to know what all 3 scores are.. Also, Why is your score so low? BK? Foreclosure? Short Sale? Loan Modification? Unpaid Taxes or Student Loans? Judgments?, etc, etc, etc.. You could have a 750 credit score and still might get denied if you have one of these deficiencies.. The lender does not make their lending decision based on credit scores alone, but rather, the complete loan profile of the borrower, the property, the income and assets, and the credit history.. For this reason, you should start by contacting a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Sep 17th 2015
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