Is it possible to refinance to lock in a low interest rate with bad credit?

[Frank B.]

My parent's current mortgage loan is a fixed 20yr loan at a 5.75 interest rate. Unfortunately times haven't been perfect and their credit isn't very good, but the mortgage is always paid even if it's a few days late. Im wondering if it would be possible to take advantage of the current interests rates with a little help. I too have had an early history of bad credit but have been able to save 35K, which I would gladly invest in our home to help lock in a much lower interest rate. Any advice is greatly appreciated. Below I will provide as much helpful info as I can.

Home value:
1. 530K-1.4M (Various estimating websites such as zillow.com & epraisal.com)
2. 697K (Tax assessed value)

Loan type and term: 20 Years Conventional


Original principal balance: $288,000.00



Contractual remaining term: 10 years, 11 months
Interest rate: 5.75%


Current principal balance: $191,100.79

Total monthly payment: $2,573

Note: My parents rent the basement and 1st floor for a total of $2950 and my father will have a pension in the range of $3500.

[Evan Bedard]

Welcome to the forum Frank B.

Your parents seem to be in a perfect position to qualify for a refinance, but the credit factor alone may make this extremely difficult to do so. Most lenders want to see a good 12 month payment history on the loan. Do you know what their credit scores are at this time?

[Frank B.]

I cannot be sure but it can't be much higher than a score of 600. I've just learned about a reverse mortgage and was wondering your thoughts on this option? Thank you for your help.