How to Refinance a Loan
- 1). Locate the website Annualcreditreport.com and order your free annual credit report. You can go with one bureau, but to be thorough, have a compilation credit report done that includes information from the big three; Equifax, Experian and TransUnion. Pay the fee if you want a copy of your scores.
- 2). Review your credit report. If there is wrong information that doesn't apply to you, or if some of your good credit is unreported, write a letter to the bureaus, disputing those items that are in error. Submit documentation for any good credit that you want added to your profile.
Wait for the bureaus to respond. Review their reply. If they did not resolve the issues to your satisfaction, continue sending dispute letters, until you are satisfied with the results. - 3). Gather your paperwork. You will need to provide current pay stubs and statements for your checking and savings accounts, to apply for refinancing. Lenders will look at your employment, your income and debts and your credit, in order to process your loan.
- 4). Compare your options. Examine the refinancing programs offered by different lenders. Three things will determine the loan programs you will qualify for: income, credit and equity. The combination of these three important factors determines what types refinancing options you will be offered.
For example, if you have a low income and equity in your home, but have a high credit score you will have more programs at competitive rates to choose from. These options will not be available to you if have a history of late payments, even if you hold a lot of equity in the home.
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