 TITLE: Your Guide to Refinancing a Mortgage With Bad Credit CONTENT: If your credit score falls under the 620 threshold, you may not be able to compare offers from multiple conventional lenders, but you still have options:\n1.  **Apply through your current lender.** Let your mortgage lender know you're interested in a refinance. It might be more likely to work with you to keep your business, and it might be more willing to take into account factors other than credit score. But you'd also be smart to shop around and compare rates from other sources, and let your lender know you're exploring or have received other offers.\n2.  **Choose an FHA refinance option.** The Federal Housing Administration (FHA) provides multiple mortgage refinancing programs for those with lower credit scores. They include:\n*   _FHA streamline refinance_: As its name implies, this process allows you to refinance an FHA loan with less paperwork than a typical refinance, as long as you've made 12 on-time mortgage payments. It will typically result in a lower mortgage payment.\n*   _FHA rate-and-term refinance_: You can refinance a conventional loan into an FHA loan, but you won't be eligible for the streamlined process, and you'll need to supply income and credit verification. You also must be able to demonstrate 12 months of on-time mortgage payments.\n*   _FHA cash-out refinance_: This option allows you to get a new home loan larger than your previous loan, plus cash for the difference. To qualify you'll need at least 20% equity in your home and a history of on-time payments for 12 months—or for the length of the loan term so far, if it's shorter than that.\n4.  **Look into a VA interest rate reduction refinance loan.** If you currently have a home loan from the U.S. Department of Veterans Affairs, known as a VA loan, you can refinance it without undergoing a credit underwriting process or a home appraisal. You could also avoid paying out-of-pocket fees, since they can be rolled into the cost of the loan. The agency recommends comparing rates from multiple lenders before moving forward.\n5.  **Consider a USDA streamline refinance.** Current homeowners with mortgages from the U.S. Department of Agriculture can refinance their USDA loans even if they have no or low equity. Similar to an FHA loan refinance, you're not required to undergo a credit review, but you must show 12 months of on-time payments. You must also meet income eligibility requirements.\n6.  **Apply for a cash-out refinance**: A conventional cash-out refinance is typically easier to get for borrowers with poor or fair credit than a traditional refinance. That's partly because the lender that issues your new loan has the ability to seize your home as collateral if you default on the mortgage. Be wary of closing costs and private mortgage insurance, however, which you may have to pay if your loan is 80% or more of the home's value. These costs could negate or reduce the value of the refinance. END