Your Questions About Mortgage Refinancing With Bad Credit

Sharon asks…

Is there a way to get a VA loan with bad credit score?

I am eligible for VA loan which doesn’t require FICO score but lenders do. Been renting for 20 years and om ready to retire from Air Force and stay in one place. Never missed rent payment which was always more than any mortgage payment in my price range.

John answers:

Hi Air Force Steve,
If you have a minimum credit score of 580 there a few lenders that can approve you for a VA Loan (Quicken Loans being one of them.) However, you probably won’t be able to get 100% refinancing of your home’s worth if you’re at 580.

Try raising your credit score as much as you can. More options will definitely open up for you.

Let me know if you have any other VA loan questions. I’ve included some links that have more in-depth info on VA loans and how to improve your credit score that may be useful. Good luck!

Betty asks…

Need to refinance with bad credit profile?

We would like to refiance and have a poor credit rating, but are in the process of re-establishing good credit. We are both civil service employee’s and have a decent combined gross income. Can anyone help? If you think you possibly can please leave your email address and I will send you details. Thank you.

John answers:

You can easily refi with bad credit, as long as you have a good mortgage history. My company does refi’s and purchases with scores as low as a 500. Call some mortgage brokers, they can help you with the process.

Mandy asks…

how do i get my mortgage company to sign my house over to my daughter?

I wont to let my daughter take over my mortgage . which is a small amount left over on mort. But she has bad credit how can we get though this please help any suggestion

John answers:

If she’s not on the mortgage, there’s really no way to put her on the mortgage (in her name) unless you refinance, but if she has bad credit she may need you to co-sign. Or you could refi and have her co-sign with you then it would be in both of your names but it would still show up on her credit report. This is unless she has such bad credit that they won’t let her co-sign.

The only other option I can think of is to do a quick claim deed, though it puts the deed in her name, the mortgage would still be in your name.

Lizzie asks…

What are good ways to get your credit up?

Other then paying your bills on time and credit cards. We have one credit card and that is all we need.

Also not sure if this helps credit or makes it worse till it’s paid off but we have a car loan and mortgage loan.
By the way my husband’s score is 608 and mine is 688 … I did the credit report today. His was higher then that, it dropped since last year and mine got a little higher since last year.

John answers:

Here are several tips to raise up your credit :

1. Lower your balances
Your balance to credit limit ratio is one of the largest factors in your score. Lower your balances and your score will skyrocket. If you don’t have the cash to do this, see tip #5

2. Increase your credit limits
If you have a 4K balance on a 4K card, that hurts your score. A 4K balance on a 6K limit card however, is much better. Call your card companies ask for as large a credit increase as possible. Also, make sure they do a “soft” pull, not a “hard” inquiry on your credit. That way the credit increases don’t ding your score with an inquiry.

3. Dispute any inaccurate or invalid entries on your report
I had a credit card that was showing up twice on my report. So it looked like I was using twice as much credit as I really was. You can dispute even old collections by making the creditor validate the account. You can also hire (cheaply for a lawyer) a service to do all this for you.

4. Re-age your account
Ask your creditor to delete an old late-payment. This only works if you’ve been paying on time recently. Call your creditor and ask if they will “re-age” your account which will delete any late payments on your account.

5. Refinance your unsecured credit cards into a term-loan
This will lower your credit utilization ratio. At most banks it’s nearly impossible to get a personal loan to refinance credit cards. However a new bread of lenders, in peer-to-peer lending make this option much simpler.

6. Start using that old account again
Don’t ring up a huge balance, but if you have an old account that you haven’t used in a year, it might not be reporting on your score (you do know your score, right? If not MyFico is the only legit place to get your score).

Good Luck!

Charles asks…

Does it bug you when Conservatives insist allowing people to buy homes they couldn’t afford tanked the economy?

… And then totally leave out the predatory business end of it?

Don’t mortgages have to be SOLD to people from businesses? And wasn’t it business that made money off these risky investments? Wasn’t it business that the Government ended up having to bail out with taxpayer money?

John answers:

This is one of the Republican lies that irratate me the most. Yes there were some bad loans made but that is an insignificant portion of the housing bubble. Actually bubble is the wrong term for it. The economy receded away from housing, a bubble suggests housing jumped out away from the rest of the economy. A couple years before the housing crash I became aware that nearly a fourth of our economy revolved around construction and housing and that sent alarm bells ringing in my head. I even got a best answer on here predicted the enevitable result of so many people working in a service industry.

Today the news is scarier. %80 of our economy is service industry. That’s not sustainable. Without magical money from credit we couldn’t sustain half that. Credit however needs real wealth backing it to sustain itself. We don’t have the real wealth backing it. Same reason housing prices crumbled. Not because they were excessively priced but because the wealth was not there to back the notes. People bought houses expecting to make the same or money. Thing is even if they made the same money inflation and taxes ate them up. That money didn’t go as far as it used too. Yes we HAVE had serious inflation for at least 5 years now. Really more like 12. Sure you can buy a yacht for less but real measures of standard of living, food, medicine, gas and utilities have all risen sharply year after year. Wages have not just stagnated they have dramatically declined. The top earners saw wage increases but most everybody else at best lost ground to inflation & taxes and most took significant pay cuts just to stay employed.

Doesn’t take a great deal of evident to deflate the whole bad loan idea. Foreclosures are spread evenly accross income groups. If bad loans was the cause wouldn’t %75 or more be to low income people? Value of houses foreclosed on is again spread pretty evenly. The home price index (link included) is more telling evidence. If subprime was the main culprit upper end house values would remain mostly immune to the crisis. That was not the case. Some of the biggest drops in prices were high mid to upper end houses. Many home owners who had to relocate literally were forced to walk away from homes because they suddenly owed far more than the house was worth. Some just cut their losses choosing cheaper housing and walking away because it was good money after bad. They’d never have enough equity to pay the note.

Predatory lending is a serious problem. I’m personally a victim of it. I actually had to have a local news channel do a story on my problems with a predatory lender to get them to crediit a penny of over a year’s worth of payments. The mortage company destroyed my credit preventing me from refinancing and I couldn’t sell the house even at a loss since they refused to credit my payments. There are at least 3 such house theft corporations which seek out homes with built in equity and attempt to force foreclosure to make a quick profit. The three companies contributed at least half a million foreclosures between them. Which seriously aggrvated he problem. Other predatory lenders tarted groups they knew couldn’t pay. Illegals were a favorite of some. Notes were signed fully expect to foreclose inside 18 months.

You are incorrect about a biz having to be involved. Hundred of thousands of people are paying owner financed mortgages. The only time a biz becomes involved except the title company is if the home goes into foreclosure. Others are financed by charities, Gov grants and some foreclosures are on homes that are owned by the people but they could not pay back taxes and lost their house. A small number of foreclosures have nothing to do with money. Instead they are initiated by home owners associations for non-compliance with their rules. The most famous was an elderly woman who had some plant the home owners association wanted gone. She eventually lost a house she owned but won a law suit later against the home owners association. Didn’t get her house back however.

The investments were not that risky. Republicans cite rare possibly fake situations where people bought houses without any credit or income or such nonsense. If it happened at all it was extremely rare. Mostly people lost the ability to afford the house. The avg length a home was owned before being foreclosed was well over 3 yrs if I remember correctly. Some of these homes lost were mortgages 10 even 15 years into the notes. How is that risky? Anybdy who pays 3 years on a note has demonstrated the ability to afford the note if the economy remains stable. Many forclosures were the result of divorce or other drastic changes in life. Most though people just drowned a little deeper in debt every year then the car broke down there was an emergency or family need or theft or temp loss of income and that was all it took to finish them off.

What aggravates me THE MOST is that if I’d just avoided income taxes for a few years I could ha

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