Refi or Purchase (bad credit)

eabscb · Joined: 23 Feb 2008 Posts: 9 3.77 Dollars($)

Is it easier to refi. with bad credit than it is to purchase with bad credit? If so, why? Thanks!

Guest 0.10 Dollars($)

what are you intending to do, a purchase or refinance? both are tough with bad credit. But again how much bad is your credit?

0.10 Dollars($)

Well, we're thinking of purchasing, but the more I read it seems it might be better to refinance and make improvements to existing home. Credit is horrific - mid 500's, but just brought severely past due student loan current but has not had time to be reported yet. Mortgage credit is excellent, except 1 30-day late in last 12 months.

larry · Joined: 27 Jun 2007 Posts: 3164 446.85 Dollars($)

Hi eabscb,

Welcome to the forum.

How long have you bought the property? If you have bought the property or refinanced it recently, then you cannot refinance it within a year.

Again if the loan period is coming to an end you have only a few years to pay off the mortgage, then it will be better not refinance. Rather you can take a home equity loan.

If you want to know more about home equity loan check out this article at http://www.mortgagefit.com/home-equity.html

Hope this will help you.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Samantha · Posted: Mon Mar 03, 2008 2:18 am Post subject: RE: cashout refinance for repairs

Hi eabscb,

Actually it's what you are comfortable with. If you can afford the cost of improvements, then staying in the current home would make sense or else you'll have to move out and find a new one. But somewhere I believe improvement could cost less, isn't it? and finding a new home would also require one more loan to be taken. And then you'll have 2 loans - one for the purchase and another already existing on the current home.

How much of improvement is required on the home? Depending upon this, you should do a cash-out refinance or take out a second mortgage. The extra cash in a cash-out refinance can help you in paying for the repairs whereas, if you take a second loan, then you'll have to pay for both the new one and the existing one.

I hope I could explain. Let me know if you need more clarification.

God bless you.

Samantha

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