Many people don’t realize it, but there are literally hundreds of lenders that will allow you to refinance, even when you are in foreclosure. These lenders provide loans to families in need and can help you today, regardless of your credit. There are three basic types of loans that can help you refinance out of foreclosure.
Lenders have different names or variations of these types of loans, but in general, they are all very similar. In most cases, they base their decision on a combination of the equity in your home, your income, and your credit score. By using these three factors, they can use equity to make up for a low credit score, or your income can help get you approved, if your equity or credit isn’t good enough. This allows them to approve more foreclosure loans and help more people save their home.
The first type of foreclosure loan is a traditional refinance. If you are less than 90 days late, you have equity, and the rest of your credit is decent, you may still qualify for a traditional refinance. Your credit score will generally need to be above 650 and you will need to have at least 10% equity. Your job and income will also need to be verified to make sure you can afford the new payments. Since the new foreclosure bill has passed, the FHA has also added a new type of foreclosure refinance that you may qualify for. This is similar to a traditional refi, so you’ll still need 10% equity and enough income to make the payments. It’s estimated that about 15% of foreclosure victims will qualify for this type of mortgage.
The second type is a hard money refinance. This is very similar to a traditional refinance; however, your credit will not be a deciding factor. You will only be approved if you can afford the monthly payment and you will need 35% equity in your property. Hard Money Loans are not easy to find, so if you think you qualify, we recommend completing the form on the left and using our free membership to find a hard money lender.
The third type of foreclosure loan is one that is obtained from a private money lender. A Private Money Refinance is exactly like a Hard Money Refinance, but it is with a private individual, rather than a bank or lender. Generally, you will need a minimum of 20% equity and we have seen rates as low as 7% with a private money refinance. Even if you don’t have enough equity, we have seen lenders agree to a reduced payoff amount to allow a refinance, so fill out our form and find out if a private money refinance will work for you.
Be careful with private money lenders, because they do not always have your best interests in mind. If you fail to make a payment, they can take the home away almost immediately.
Only about 15% of victims will qualify for a refinance or loan, so make sure you have a back up plan, even if you get a pre-approval.
Finding a foreclosure loan can be very hard and when you do find someone who says they can get you approved, you’ll still risk losing your home at the last minute. Mortgage brokers are notorious for telling people they are approved, only to turn them down at the last second. We can help you find a lender if you are qualified, but always make sure you have a back up plan, just in case things don’t go as planned.
Many homes are unnecessarily lost, because homeowners didn’t think they qualified for a refinance. Just because you’ve been turned down in the past, doesn’t mean we can’t get you approved.
Please complete our free evaluation and we will send you all the available options to stop foreclosure, along with our free ebook and a membership to our full website.