The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • Submit an Article
  • Books
  • Categories
  • Coaching
  • Book Lynnette
  • Money Coach University™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • Submit an Article
No Result
View All Result
The Money Coach
No Result
View All Result

My Credit Score is 610. Can I Refinance into a Fixed Rate Loan with My Score?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Real Estate
Reading Time: 2 mins read
refinance
16
SHARES
260
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Q: I have an arm at 6.5% that adjusts in august. My credit score is 610. Can I refinance into a fixed rate loan with my score or should I consider another arm?
A: As of January 2010, fixed-rated mortgages dropped to about 5%, a very attractive rate for homeowners thinking about refinancing.

However, those very low rates are going to the banks’ very best customers: those with pristine credit (i.e. FICO scores above 740) and individuals with at least 20% equity in their homes.

For everyone else, expect to pay a higher rate. Since you said you do not plan to be in the house much longer (3 years at most), an ARM may not be a bad move.

According to BankRate.com, 5/1 Adjustable Rate Mortgages are currently averaging 4.36% nationwide, compared with a rate of 5.14% for 30-year fixed rate mortgages nationwide.

Calculate Your Break Even Point

Use the mortgage-refinance calculator on Bankrate’s site (http://www.BankRate.com) to run a couple of different scenarios. Also, talk to a mortgage broker or to your existing lender about what rates and terms you’d likely qualify for in the current market.

They will be able to tell you your “break even point.” That’s the number of months it would take you to recoup the cost associated with refinancing your home.

For example, if your refinance costs $9,000 to get done, but it saves you $200 a month (because you got, say, a 5.25% interest rate), then your break even point would be 45 months – or 3 years and 9 months.

As long as you live in the house that long, it will have been worth it for you to refinance. If you live in the house for a shorter period of time, then you basically lost money on the refi.

Consider FHA Alternatives

If you don’t like what you see in the breakeven analysis, and you simply want the security of a fixed rate loan – which is the better deal for most people right now – then think about getting a government insured mortgage.

Among conventional lenders, I suspect that your 610 credit score would put you in the bottom tier of customers, if you can get approved at all.

But that wouldn’t necessarily be the case with a government-backed FHA loan, which would certainly be a mortgage option to consider.

FHA loans are based on your debt-to-income ratio, and not your credit score. But a lot of lenders who do FHA loans are imposing their own credit score requirements for these loans, even though the government doesn’t. If you don’t meet their minimum credit score cutoff, lenders (and soon the government) will charge you a higher rate.

See the Housing and Urban Development’s website (http://www.hud.gov) for more information on FHA loans.

Tags: home refinancerefinance
Previous Post

How To Avoid a Second Bankruptcy

Next Post

Impact of Bankruptcy on Your Spouse

Lynnette Khalfani-Cox, The Money Coach

Lynnette Khalfani-Cox, The Money Coach

Lynnette Khalfani-Cox, The Money Coach, is a renowned financial expert, author, speaker, and media personality, empowering people to achieve financial success.

Related Posts

Beautiful home

Refinansiering Med Sikkerhet I Bolig – Refinancing with Security in Homes

by AskTheMoneyCoach UK Edition

Refinancing Your Home There are many reasons to refinance your home, but usually, it is to save a money on your monthly payments. You can also refinance for other reasons, but these are the most common. This can be accomplished by lowering your interest rate or extending the length of...

Text MORTGAGE APPLICATION on Office desk table with keyboard, notepad and analysis chart on a white background.

Two Important Mortgage Terms You Need to Understand

by Lynnette Khalfani-Cox, The Money Coach

Getting a home loan can be a confusing process.  You have to decide whether to get a fixed-rate mortgage or an adjustable-rate loan. You’ll want to shop around and qualify for the best loan rates and terms. And when you’re signing on the dotted line for one of the biggest...

long way road of asphalt with white straight line in the middle and infinite direction and travel distance concept. asphalt and mountains around for traveler and adventure concept. no cars no people long-distance move

Making a Long-Distance Move? Here’s How to Budget and Plan for Success

by AskTheMoneyCoach

Moving can be exciting, but it can also be one of the most stressful experiences you will ever face. This is especially true when you are moving long-distance.  Whether you are moving for a new job, to be closer to family, or simply for a change of scenery, it is...

Sad unhappy black female and male in red t-shirts look at computer, have problems with gadget, service and bills

The True Cost to Get Rid of Your Timeshare

by AskTheMoneyCoach

Owning a timeshare can be a great way to enjoy vacations, but it's not for everyone. If you want to get rid of your timeshare, you may be wondering about the costs involved. From legal fees to transfer fees, there are several expenses to consider. This guide will help you...

African American real estate agent professionally explaining about housing agreement to couple

Negotiating Your Rental Agreement: Tips for Saving Money

by AskTheMoneyCoach

When searching for a new home, you’ve probably come across some great places just slightly out of your budget. If this is the case, and you really want the place, you could try negotiating your rental agreement to get precisely what you want. Many landlords will be open to adjusting...

VA loan. US department of veterans affairs papers.

VA Loans Help Veterans Achieve Their Dream of Homeownership

by AskTheMoneyCoach

For many Americans, the dream of owning a home is a significant aspiration. However, this can be challenging for some individuals, especially those who have served in the military. Fortunately, an exceptional program provides extra assistance to veterans and current active service members in achieving their property-owning dreams. This program...

A perfect neighborhood. Houses in suburb in the north America. Top of a house with nice windows over blue sky. Beautiful Home Exterior. Real Estate Exterior Front House

The Truth About Race and Homeownership – Video

by Lynnette Khalfani-Cox, The Money Coach

https://youtu.be/JjKNdxrKIVwIn this video "The Truth About Race and Homeownership," I discuss the sad truth about race, homeownership, age, and other factors in America. I mention two recent research reports, one from the National Association of Realtors and the other from the Federal Reserve Bank of New York, highlighting the problem. According...

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1529 shares
    Share 612 Tweet 382
  • What to Do if Your Spouse Stole Money From You

    1311 shares
    Share 524 Tweet 328
  • What to Do If You Can’t Afford to Leave Your Spouse

    1276 shares
    Share 510 Tweet 319
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1131 shares
    Share 452 Tweet 283
  • What Do All Those Strange Codes In My Credit Report Mean?

    901 shares
    Share 360 Tweet 225
  • Which Credit Report is More Important: Equifax, Experian or TransUnion?

    869 shares
    Share 348 Tweet 217
  • Do This Now If Your Wages Were Not Reported

    855 shares
    Share 342 Tweet 214

Categories

  • Bankruptcy
  • Budgeting
  • Building Wealth
  • Careers
  • Couples and Money
  • Coupons and Deals
  • Covid-19
  • Covid-19 Video
  • Credit Cards
  • Credit Reports
  • Credit Scores
  • Crypto
  • Debt
  • Entrepreneurship
  • Family Finances
  • Featured
  • Identity Theft
  • Insurance
  • Investing
  • Loans
  • Paying for College
  • Personal Finance
  • Press Releases
  • Real Estate
  • Retirement
  • Saving Money
  • Scams
  • Student Loans
  • Taxes
  • Uncategorized

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Book Lynnette
  • Money Coach University™
  • Home
  • Subscribe to Newsletter
  • Submit an Article

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist