How Do Lenders Evaluate a Subprime Refinance Application?

Getting a remortgage does not necessarily require you to have perfect credit. Those that have low credit scores can still get approved for a mortgage. Here are the basics of how lenders evaluate a subprime remortgage application.

Look at Nature of Credit Problems

Many lenders are going to reject those with bad credit automatically simply because they have a low credit score. Subprime lenders are going to look into the details of why you have bad credit before deciding whether to reject or approve your application. For example, if you made a few late payments on a credit card, this is not going to be looked at as negatively as if you had gone through a foreclosure.

Income

As part of the subprime refinancing approval process, they are going to want to verify your income. They want to see that you will have enough money to live comfortably even after making your mortgage payment. Therefore, if you have a substantial income, you are going to be able to qualify for this type of mortgage much easier. They are also going to want to check into the nature of your employment and make sure that your income is stable. If you have moved too often from one job to the other, this will not reflect on you positively.

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