When you see 'Current Mortgage Interest Rates' all over the internet advertising very, very low rates, in the 3.5%-4% you're tempted to refinance or remortgage.
And for most people that's a good idea. Because, yes, low mortgage payments do hand-in-hand with low interest rates.
But if you have bad credit, remortgage later might be an even better deal.
How do you know your bad credit remortgage is better put off? First, you need to figure out the direction in which the interest rates are moving. And the speed. Then you need to take a look at your credit report.
Unless interest rates are moving up rapidly, take a look at your credit report. It doesn't happen over night, but credit standing can be improved significantly, from a mortgage point of view with little effort.
The first thing everyone's tells you to do is to challenge inaccuracies. Usually, they don't tell you that a few months of on-time payments can make a big difference to the mortgage interest rates you can get.
A few months of on-time payments can bump you up into the next level.
There isn't much difference between, say, a credit score of 560 and 579, but there's a big one between 560 and 680,thought the difference is one point.
Mortgage lenders have different programs for different credit scores, so being above the cutoff point level is important.
Here's the credit score breakdown:
720-799 Credit Score is considered great credit.
680-719 Credit Score is considered good credit.
620-679 Credit Score considered okay by many creditors but not all.
580-619 Credit Score is considered to be bad, below average. Many mortgage lenders consider you 'subprime material' so you have to get a bad credit mortgage .
500-579 Credit Score is considered to be ugly.
499 and Below Credit Score is considered to be very ugly.
Every 1% added to the very low current mortgage interest rates you see adds a lot of money to your monthly mortgage payments.
So, if your credit scores are low, if property values are stable or increasing, and the current mortgage interest rates aren't likely to shoot up, you're better off waiting to refinance till you've improved your credit scores. That's usually the case even if interest rates are going up a bit.
If the current mortgage interest rates ARE going to shoot up, hurry and refinance.
