Rocket Mortgage® stands out as the top choice among leading companies when refinancing a mortgage with bad credit.
Mortgage refinance lenders often tout low interest rates, though in most cases, you can only qualify with good or exceptional credit. If your creditworthiness is less than desirable and you’re looking to adjust your home loan, you might have trouble getting a lender to give you a loan.
A bad credit mortgage refinance lender can be a lifeline for those looking to reduce their monthly payments while increasing their credit score. Benzinga has sorted through dozens of mortgage lenders to find the best ones who will work with people with credit scores below 620.
Quick Look: Best Bad Credit Mortgage Refinance Companies
- Best for Efficiency: Rocket Mortgage® (formerly Quicken Loans®)
- Best for Variety: Network Capital
- Best for Working with Bad Credit: PacShores Mortgage
- Best of the Big Boys: Citibank
Best for Efficiency: Rocket Mortgage® by Quicken Loans®
- Best For:Online MortgagesVIEW PROS & CONS:securely through Rocket Mortgage (formerly Quicken Loans)'s website
Pros:
- Move at your own pace
- Submit financial documents online
- Lock in a pre-approved rate for up to 90 days
- Application process takes minutes
Cons:
- No in-person options
- Must apply to view interest rates
Nitty Gritty: Rocket Mortgage has become one of the go-to lenders for those seeking mortgage refinancing with bad credit due to its flexible loan products and personalized approach. They offer FHA loans, which allow credit scores as low as 500 with a 10% down payment, and VA loans for military members and veterans with no minimum credit score requirement.
Rocket Mortgage® offers options for a cash-out refinance, lowered monthly payment and a shortened loan term. They do not publish interest rates online, so you must apply to get your individualized quote.
Our Rocket Mortgage review has our full thoughts.
Best for Working with Bad Credit: PacShores Mortgage
Pros:
- Alternative financial verification methods
- Personalized approach
- Multiple financing types
- Nearly all applicants are accepted
Cons:
- Longer closing time
- Must apply to view interest rates
PacShores Mortgage provides manual underwriting for borrowers with unique financial situations, taking a personalized approach to evaluating credit history and mitigating factors. It has a team of experienced loan officers who guide you through the process, offering competitive rates and efficient closings.
Alternative documentation is accepted instead of financial statements, pay stubs, or tax returns. Available loan programs include refinance and purchase of single-family, multi-units, condos, apartments, commercial properties and buildable lots. PacShores does not publish rates; you must apply for your individualized quote.
Best for Variety: Network Capital
Pros:
- Tailored for those with lower credit
- Live rates on website
- Multiple refinancing types
- Close in about two weeks
Cons:
- Limited loan details
- Not available in all states
Network Capital provides stated-income and non-prime loans tailored for individuals with lower credit scores or past credit issues.
Whatever your situation, Network Capital can likely help you get the home loan refinance you need. Its programs include VA IRRRL (a no-appraisal, no-income verification, limited documentation required loan), FHA Streamline (a no-appraisal, no employment or income verification, reduced FICO score loan) and HARP 2.0 (a no-appraisal, lowered loan-to-value, income, asset and FICO credit score loan).
Best of the Big Boys: Citibank
Pros:
- Personal loans and mortgages
- Competitive rates
- Branches you can visit
- Multiple loan types
Cons:
- Higher fees than other lenders
- No USDA loans
Citibank is your best bet among larger banks. In addition to 30-year and 15-year fixed, Citi offers FHA loans for bad credit, VA home loans and jumbo loans. You’ll enjoy the clout of a big bank with the personalized attention of a smaller organization.
With a variety of programs available, including FHA and VA loans that have more lenient credit requirements, Citibank makes it possible for many homeowners to take advantage of lower interest rates and better loan terms through refinancing. Additionally, Citibank's knowledgeable loan officers provide personalized guidance throughout the refinancing process and its online tools and resources help borrowers understand their options and make informed decisions.
What is Considered Bad Credit?
Bad credit would be having a credit score that’s 600 or below. Most mortgage lenders require a credit score of 620 or higher, though some companies will work with those who have a creditworthiness below 600. The tradeoff, however, is that you might be charged more interest until you improve your creditworthiness.
“If you are in a time crunch and do not have the time to fix your credit, be prepared for higher interest rates as these loans are more risky for the lender,” says Reed Letson, owner of Elevation Mortgage.
RELATED: How to Refinance With Bad Credit
Why You Should Trust Us
Benzinga has offered investment and mortgage advice to more than one million people. Our experts include financial professionals and homeowners, such as Anthony O’Reilly, the writer of this piece. Anthony is a former journalist who’s won awards for his coverage of the New York City economy. He’s navigated tricky real estate markets in New York, Northern Virginia and North Carolina.
For this story, we worked with Reed Letson, a mortgage broker and owner of Elevation Mortgage in Colorado.
How We Chose the Best Bad Credit Mortgage Refinancing Companies
To determine the best mortgage lenders for bad credit, Benzinga analyzed over 100 mortgage lenders and brokers. We gave weight to mortgage lenders offering multiple loan types, working with consumers with a credit score below 620, and offering alternative income verification. We also favored mortgage lenders with an online loan application ability and a mobile app. We included mortgage quote aggregators in some lists to make it easy for you to compare costs. Review the full methodology here.
Frequently Asked Questions
Can I refinance my house with a 500 credit score?
Generally speaking, no you can’t refinance a house with a 500 credit score. Most lenders require a minimum score of 620 for conventional loans. Some government-backed loans can be refinanced with a lower score, though they might come with a higher interest rate or fees.
What is the lowest credit score to refinance a mortgage?
The lowest credit score to refinance a conventional mortgage is 620 for most lenders, though some might work with people who have lower scores.
Is Rocket Mortgage good for bad credit?
Yes, Rocket Mortgage offers purchasing and refinancing types for people with bad credit.
Sources
- Reed Letson, owner of Elevation Mortgage
About Anthony O'Reilly
Anthony O’Reilly is an updates editor for Benzinga. He’s won numerous journalism awards for his coverage of the New York City economy and Long Island school district budgets.
