Can I Refinance My Mortgage if My Credit Isn’t Perfect?

If your credit score isn’t where you want it to be, you might wonder whether refinancing your mortgage is still possible. The good news is, it often is—you just might need to approach it a little differently.

Here’s what you need to know if you’re thinking about refinancing with less-than-perfect credit.

Yes, You Can Refinance With Bad Credit—But It Depends

Most lenders look at a few key things when you apply to refinance:

Your credit score
Your home’s value and how much equity you have
Your income and overall debt levels

If your credit score is lower than average, you may not qualify with a traditional "A lender" like a big bank. But that doesn’t mean you’re out of options.

There are alternative lenders (also called "B lenders") who work with borrowers who have bruised credit, as long as the equity and income are there to support the loan.

What Are the Differences Between A Lenders and B Lenders?

A lenders (banks, credit unions) usually require a credit score of at least 650-680 and strong income documentation.
B lenders are more flexible on credit but often charge a slightly higher interest rate.
You may also need to budget for a small lender fee when working with a B lender.

How Much Equity Do You Need?

In most cases, you can refinance up to 80% of your home’s value.
For example, if your home is worth $500,000, you could refinance up to $400,000.

The more equity you have, the better your chances of refinancing successfully—even if your credit isn’t perfect.

When Refinancing Might Make Sense (Even With Bad Credit)

Consolidating high-interest debt like credit cards or loans
Freeing up cash flow by lowering your monthly payments
Funding renovations to increase the value of your home

Sometimes, refinancing now—even at a slightly higher rate—can be a smart move if it helps you rebuild your credit faster and sets you up for better options down the road.

The Bottom Line

Bad credit doesn’t mean you’re stuck.
You still have options—it’s just about finding the right lender and putting a solid plan together.

If you want to see what refinancing could look like for your situation, I’m happy to run the numbers and walk you through it.

Call or text (902) 402-9779, or visit www.gregmatthews.tmgbroker.com/apply.aspx to fill out a five-minute pre-approval form.