Refinance Bad or Good Credit

As you've watched interest rates move downward, you've probably already thought about refinancing your mortgage. But have you considered redoing your auto loan, personal loan, home equity loan or home equity line of credit?

Experts agree that the first step is to assess what you're trying to accomplish through your debt refinancing. Are you trying to get a little needed breathing room? Are you determined to pay as little interest as possible? Are you determined not to put one more penny than necessary into your banker's hands?

You also need to ask yourself why you have the type of credit you have and whether, as you go to refinance, you can better meet your needs with a different type of credit vehicle.

Lenders want to know your payment habits before approving you for credit. If you have a history of paying your monthly obligations on time, that's an indication that you are likely to make your monthly payments on your new loan or line of credit on time, as well. Because your credit history is a significant factor in assessing your creditworthiness, it's a good idea to check your credit report in order to correct any errors before you begin a credit application.

Knowing what to expect and anticipating potential obstacles before you apply can help boost your borrowing power. If you have less than perfect credit, or too much debt, visit our Credit Resource Center for tips on how to improve your credit rating or click on Re-Establish Your Credit. You may also contact one of our loan consultants to discuss potential financing options before you apply.

Consumers still have many reasons to refinance, even now: to get rid of mortgage insurance, to switch from a fixed-rate loan to an adjustable or vice versa, to extract cash from a house that has grown in value and, of course, to lock in a lower rate.

Finance Box
Finance Box

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