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If you’re looking to get better terms on your mortgage—such as a lower interest rate or reduced monthly payment—refinancing could be a good option. Like when you applied for your first mortgage, your credit score will typically be a determining factor in whether you’ll get approved for refinancing. However, there are also some government programs that accept lower credit scores or don’t have specific credit requirements, which means you might be able to refinance even if you have poor credit. Raise Your FICO® Score Instantly with Experian Boost™Experian can help raise your FICO® Score based on bill payment like your phone, utilities and popular streaming services. Results may vary. See site for more details. If you’re wondering what credit score you need to refinance your mortgage, here’s what you should know. What Is a Good Credit Score for Refinancing?Your credit score is a number used by lenders to determine how risky you are as a borrower and your ability to repay your loan. FICO is the most popular credit-scoring model and operates on a scale from 300 to 850. Here’s are the ranges commonly used when deciding what a good credit score is:
While having good or excellent credit could help you get approved for mortgage refinancing more easily, keep in mind that borrowers with lower credit scores might still be able to qualify with certain lenders or through specific programs. What Credit Score Do I Need to Refinance?The exact credit score you’ll need will vary by lender, the type of loan and your financial situation. Keep in mind that your credit will affect the kind of mortgage refinance rates you’re offered—in general, the higher your credit score, the better your rate will be. Here’s what you can expect, depending on the kind of loan you choose. Conventional LoanMinimum credit score to refinance: 620 to 720 (depending on loan type and lender) Conventional mortgages make up the majority of all home loans and are issued by banks, credit unions and other lenders. These loans are then usually sold to government-sponsored entities like Fannie Mae and Freddie Mac. Refinancing a conventional mortgage offers a couple of options:
FHA LoanMinimum credit score to refinance: 500 or higher (depending on the lender) Federal Housing Administration (FHA) loans are issued by approved lenders and insured by the FHA. These loans are easier to qualify for than conventional mortgages, which makes them a helpful option for borrowers who have lower credit scores or can’t afford a large down payment. There are a few types of FHA refinancing including:
VA LoanMinimum credit score to refinance: No specific minimum, though most lenders require at least a 620 credit score. The Department of Veterans Affairs (VA) assists servicemembers, veterans and eligible surviving spouses with buying homes. Similar to FHA loans, VA loans aren’t provided by the department itself—instead these loans are offered by private lenders and backed by the VA. There are a couple of refinance options available for VA loans:
USDA LoanMinimum credit score to refinance: No specific minimum, though most lenders will require a score of at least 640. The U.S. Department of Agriculture (USDA) helps borrowers in rural areas purchase homes with loans that require no down payment. These loans are provided by approved USDA lenders and backed by the USDA. There are three ways to refinance a USDA loan:
Other Requirements to Refinance Your MortgageIn addition to your credit score, there are also other common requirements that you’ll have to meet to refinance your mortgage. These standards can vary by lender and the type of mortgage you have as well as if you want to refinance through a government program. In general, you should:
Best Mortgage Refinance Lenders of 2022Find the best Mortgage Refinance Lenders for your needs. Can You Refinance Your Mortgage With Bad Credit?While it isn’t impossible to refinance your home with bad credit, it could be more difficult. Here are some options to consider:
There’s No One-Size-Fits-All RuleUltimately, the exact requirements to refinance your mortgage will vary widely depending on the lender you work with, type of loan you have and any government programs that you’re applying for. Be sure to take the time to shop around and compare your options from as many lenders as possible. This way, you’ll have an easier time finding the right loan for your needs. What is the lowest credit score to cash out refinance?You'll need to have a minimum credit score of at least 620 if you want to take a cash-out refinance in most scenarios.
Can I refinance with a 600 credit score?Your LTV ratio determines the minimum credit score required for a rate-and-term refinance on a mortgage backed by the Federal Housing Administration: The minimum credit score is 580 for borrowers with a maximum 97.75% LTV ratio. The minimum credit score is 500 for borrowers with a maximum 90% LTV ratio.
Can I refinance with 620 credit?In general, you'll need a credit score of 620 or higher for a conventional mortgage refinance. Certain government programs require a credit score of 580, however, or have no minimum at all.
Can I refinance with a 550 credit score?You may be able to do a rate-and-term FHA refinance with a credit score of 500 to 580, but those loans can be hard to access. That's because you have to find an FHA-approved lender, and lenders can add their own guidelines to the FHA's rules.
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