When should we refinance?

rynn70 · Joined: 11 Oct 2008 Posts: 1 1.48 Dollars($)

To make a long story shorter my husband and I used to have excellent credit before signing on with a credit management program, I had no idea how it would negatively affect our credit score. We were making our payments but not getting out of debt. So we turned to a debt management program. We decided to get out of the program by refinancing our home last year to combine some debts and it worked fine for us in the short term, however I'm embarrassed to say that we're paying such a high interest rate. 11% or so since the program hurt our score.
So here's the question, I recently found out that our high score (or combined, not sure which) is about 650. Should we wait until our score is higher or try to refinance now? The market is so crappy right now I'm not sure we could even get someone to refinance us. At our current credit score what interest can we expect to get?

Guest

I would refinance now. FHA, low to mid 6's

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chrisburns · Posted: Mon Oct 13, 2008 4:31 am Post subject:

Yes if you have a middle credit score of 580 you can probably get an FHA loan which would get you a 30 year fixed rate in the 6% or so range.

It would be a huge benefit to you in your situation.

banker0679 · Posted: Mon Oct 20, 2008 6:23 pm Post subject:

I would try to refinance immediately. The debt program may hurt your credit as some lenders view it as a bankruptcy Chapter 13.

FHA allows up to 95% loan to value for cashout refinancing. You'll probably get a rate in the low 6's, and maybe in the high 5's. This will depend on the day as the rates have been dropping/rising in just a couple of days. Get your application in with your lender and be prepared to lock the rate before it goes up!

Please let us know how everything goes.

thanks
Robert

brian1 · Posted: Sat Oct 25, 2008 5:11 pm Post subject:

How much do you owe and how much is the home worth
Both conventional and FHA will get you a better rate it will depend on your loan to val;ue as to which would be the better fit.

Brian

tim1 · Posted: Sun Oct 26, 2008 8:50 am Post subject: Start the process

Obviously other members have told you the average of rates right now, so I would suggest you start shopping. Just because you start the process does not mean you have to finish it. If your credit score is 650, you will qualify for the best programs through FHA, so I would not put it off any longer. It is doubtful you would qualify for a conventional loan, but your 11% needs be reduced.

Good Luck!

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