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Can I Refinance My Mortgage With Bad Credit?
You may be able to refinance a mortgage with a lower credit score. Credit requirements vary by lender and the type of loan.
Barbara Marquand Senior Writer | Homebuying, homeownership, mortgages
Barbara Marquand writes about mortgages, homebuying and homeownership. Previously, she wrote about insurance and investing at NerdWallet and covered personal finance for QuinStreet. Prior to that, she wrote for national consumer and trade publications on a wide range of topics, including business, careers and parenting. Her work has appeared in the Associated Press, MarketWatch, MSN Money, The New York Times, The Washington Post and many others.
Beth Buczynski Lead Assigning Editor | Mortgages, owning a home, dealing with debt
Beth Buczynski is a lead assigning editor on the international expansion team at NerdWallet. Beth works with writers and editors to bring financial clarity to readers across Canada's 10 provinces and three territories. Previously, Beth spent four years covering mortgages and homeownership for NerdWallet, first as a writer and later as an editor. As a writer, Beth's work was featured by The Associated Press, The Washington Post and Money magazine, among others. Beth holds a master’s degree in public communication from Colorado State University.
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Refinancing your mortgage is more challenging with bad credit, but it may still be possible.
Credit requirements vary by the type of refinance loan and the lender. Some mortgage refinance options are available for people with credit scores in the 500s and 600s.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
FHA loans, which are insured by the Federal Housing Administration, have less strict credit requirements than other types of mortgages.
FHA streamline refinance
To qualify for an FHA streamline refinance, your current mortgage must be an FHA loan and you must be current on the payments.
There are two types of FHA streamline refinance loans: credit-qualifying and non-credit-qualifying. The credit-qualifying option requires a minimum credit score of 580. The non-credit-qualifying FHA streamline refinance doesn't require the lender to do a full credit check or calculate your debt-to-income ratio. The downside? You may pay a higher interest rate than with the credit-qualifying version. A home appraisal isn't required for either option.
You can refinance any type of mortgage, such as a conventional home loan, into a rate and term FHA refinance. "Rate and term" simply refers to the ability to get a lower rate or change the loan term. The lender will do a credit check and calculate your debt-to-income ratio. The FHA requires a minimum credit score of 580.
FHA cash-out refinance
An FHA cash-out refinance lets you tap into home equity. The new loan can be up to 80% of the home's value. The FHA requires a minimum credit score of 500 for a cash-out refinance, but lenders may require higher scores.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Guaranteed by the U.S. Department of Veterans Affairs, VA loans are for military service members, veterans and eligible surviving spouses. The VA doesn't mandate a certain credit score for purchase or refinance loans, but lenders can have their own requirements, which may be as high as 660.
VA streamline refinance
If you already have a VA loan, you can refinance with a VA Interest Rate Reduction Refinance Loan to lower the interest rate or move from an adjustable to fixed rate. This loan is also known as a VA streamline refinance because the process is simplified. The VA doesn't require a new credit check or appraisal for a streamline refinance, but the lender might.
Qualified homeowners can refinance a conventional or VA mortgage with a VA cash-out refinance. This refinance loan allows, but doesn't require, eligible borrowers to tap into home equity. It also gives the opportunity to save money with a lower interest rate, move to a fixed-rate from adjustable-rate mortgage or, if you have a conventional loan, get rid of private mortgage insurance.
USDA streamlined assist refinance loans
USDA mortgages are for rural home buyers and are backed by the U.S. Department of Agriculture. You must have a USDA mortgage to take advantage of the streamlined assist refinance loan. The program doesn't require a new credit review, debt-to-income calculation or home appraisal, in most cases. However, you must have been current on your mortgage for the 12 months prior to applying.
Two programs may allow you to refinance if you owe more than your home is worth: the Freddie Mac Enhanced Relief Refinance and the Fannie Mae High Loan-to-Value Refinance Option. Both programs are geared to homeowners who wouldn't otherwise qualify to refinance because they owe more than 97% of the value of their homes. They replace the Home Affordable Refinance Program, known as HARP, which operated from 2009 to 2018.
If you can't refinance now because of a bad credit score, focus on rebuilding your credit. Here's the bright spot: It's possible to elevate a low score fairly quickly. Small actions, such as paying bills on time and using a smaller percentage of your credit limit on credit cards, can make a big impact. Get your free credit score and monitor the changes.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Bethpage offers a home equity line of credit with a high borrowing limit, no annual fee and a fixed-rate option. It’s easy to see HELOC qualifications, too.
