- 1). Begin building your cash reserve. You will need a minimum of 3 to 5 percent of the loan balance for closing costs on the mortgage refinance. Save your cash over the next 24 months to meet this financial obligation.
- 2). Regain your credit score points. Points deducted from your credit score after a discharge hurt your financing options. Improve your credit over the next two years to qualify for a low-rate refinancing. Aim for a minimum score of 680. Open new accounts, such as a secured credit card account with your bank. Pay your current mortgage payment on time each month, and don't accumulate credit card debt.
- 3). Check the requirements for an FHA mortgage refinance. If you don't have the minimum credit score to qualify for a conventional mortgage after two years (need a minimum score of 680), apply for a mortgage refinance with an FHA mortgage provider. Mortgages insured by the Federal Housing Administration require a 620 credit score, and you're eligible 24 months after a discharge.
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