Can I Get A Bad Credit Refinance If I Am Unemployed?

Many homeowners with bad credit are taking advantage of new government plans to make it easier for bad credit mortgages to be refinanced to a lower rate or longer term. However, not everybody can get approved, even if they are willing to pay large amounts of fees. However, you can still get a bad credit refinance if you are unemployed.

Low Loan to Value

Your LTV or ‘Loan to Value’ is a key component of what a lender will use to make a decision on a bad credit refinance. This number basically shows how much of the house the borrower already owns. If you have a high LTV you can still be approved for a bad credit refnancei if you are unemployed. The problem many people are seeing these days is, however, that their values have dropped significantly and the LTV is higher than it would have been a couple of years ago.

Low Debt to Income

Although you would assume that if you are unemployed you would be out of luck in the ‘debt to income’ field, you may be surprised. If you have a cosigner that has a steady income stream, or if you are virtually debt free other than your mortgage you may still have a good enough debt to income ratio to be approved for a bad credit refinance if you are unemployed. With no other major debts a bad credit mortgage lender may not view you as too high of a risk.

Change in terms

If you have bad credit mortgage it is very likely that you will be able to refinance in to another bad credit mortgage even if you are unemployed which will give you lower monthly payments. Many times this requires you to refinance in to a longer term mortgage. If you are willing to add another 15 years on your mortgage for a lower rate and lower monthly payments, the lender many times does not see you as more of a risk than you currently are, even though you may be unemployed.

Related posts:

1. Can I Get A Bad Credit Refinance If I Am Unemployed?
2. How Can I Refinance My Bad Credit Mortgage?
3. Can I Refinance My House With A Bad Credit Score?
4. Why Would I Be Turned Down For A Bad Credit Mortgage?
5. Should I Pay Points On My Refinance?