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“Can I Still Refinance with Late Mortgage Payments?”

“Can I still refinance with late mortgage payments?” is a fair question to ask. Having a late payment can be a problem in refinancing. However, depending on how late the payments are and the number in the past year, you may still be able to refinance. And that is important — since we are seeing historically low rates that could save you thousands over the life of the loan.

How Late Were the Payments?

You may be eligible to refinance your mortgage regardless of late payments if they are within 30 days. That’s because often your lender will not mark a payment as late unless it crosses that threshold. That grace period for reporting you to the credit bureaus may just be 15 days, though. If your late payments were not late enough to get communicated outside the lender, you are fine.

The Impact of Payments on Your Options

Assuming the payments were late enough to be listed on your credit report, the lender will see that when they review your application. Your payment history is critical to being granted a refinance because a refinance replaces your current mortgage with one at a lower interest rate (resulting in lower monthly payments). Since it is a new loan, the same credit standards will be applied to your application as when you sought your original mortgage. If you are unreliable with mortgage payments or otherwise seem to have financial difficulties, most lenders will not want to back the loan.

You may be accepted for a conventional refinance with certain lenders if the following are true:

  • You have a reasonable justification for the late payment.

  • Your assets and income are solid.

  • You have good credit.

"Can I Still Refinance with Late Federal Mortgage Payments?"

Do you have an FHA, Freddie Mac, Fannie Mae, or VA mortgage? Here is specific information related to some common federally backed mortgages:

Refinancing FHA Mortgages with Late Payments

Yes, as long as it was more than three months ago and there is only one late payment in the last 12 months. And again, any late payment must be beyond the grace period of the lender to impact your credit — and in turn be problematic to refinancing.

Refinancing Freddie Mac or Fannie Mae Mortgages with Late Payments

If you have payments that have been reported to credit bureaus, they need to be back twice as far as the FHA’s rules — 6 months — to refinance. There can be no more than one late payment in the past twelve months.

Refinancing VA Mortgages with Late Payments

These mortgages are the best in terms of refinancing options. Regardless how recent late payments have occurred, you may be accepted for a VA streamline refinance.

"Can I Still Refinance with Late Mortgage Payments?"

As you can see above, you do have options. However, to be certain you are making the right choice, you need a trusted advisor. At Best Advantage Mortgage, there’s a reason we have 5.0 Stars on Google based on 45 ratings. We take the time to get to know you and your goals so we can tailor a loan to help you achieve them. Meet our team!

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