A Good Credit Score isn’t Good Enough When it Comes to Refinancing your Mortgage

With mortgage rates plummeting, homeowners are flocking to lenders with hopes of refinancing their home loans at a lower interest rate and saving loads of cash in the process. On a $250,000 30 year loan, refinancing from 8% to the record lows in the 5% range that were reported in early January would lower monthly mortgage payments by nearly $500. Over the course of the entire loan, this amounts to over $170,000 worth of savings.

Most people, however, will not be able to qualify for a refinance loan and an even larger percentage will not be able to get approved for the best interest rates.

Having a good credit score simply isn’t good enough when it comes to getting the best rates on a refinancing loan. Most people consider a 720 credit score to be a good score, says Chris Freemott, president of All American Mortgage, but to get the best rates, borrowers will need a credit score of 740 or higher.

For years, people looking to improve their credit score have been searching for a way to turn a bad credit score into an average credit score or better. By taking credit scores in the 500 range or lower and increasing them to the mid to high 600s, people found they were able to significantly improve their quality of life. They were able to get into homes that were previously denied to them and qualify for loans and credit cards with reasonable and manageable interest rates.

Today, a shift has been made where it is not just those with poor credit who could benefit from credit repair or other credit improvement services. As is evidenced by the current refinancing market, even those with good credit scores may be able to benefit from pushing their credit scores even higher.

If you are looking to take advantage of the low interest rates, take some time to research a variety of lenders and shop around for the best rates. Don’t get discouraged if you get rejected by one lender because there may still be others who would be happy to help you. And if lenders are consistently turning you away or not offering the rates you want because of your credit score, then making use of credit repair services like those provided by Lexington Law may be the first step you need to take in order to accomplish your goals.

To find out if credit repair may be a good solution for you, Lexington Law offers a free, personalized credit consultation.