Refinancing your mortgage with bad credit can be an intimidating task. There are steps you can take to improve your options before you start applying for a mortgage. Here are three easy tips to help you get started.

Put Some Money in the Bank

If you dont have a savings account, open one. Start squirreling money away in your savings. Cash in the bank will improve your application; also, the lender may require you to prepay points in order to qualify. The more cash you have on hand the better. One easy way to put some cash in the bank is to go through your attic or garage and sell some things on eBay. The more cash you have on hand when you apply for the new mortgage the better.

Clean Up Your Credit

Cleaning up your credit is easier than you think. The most important thing you need to do before anything else is make sure your credit reports are accurate. If there are errors in your credit report it will cost you money.

Make sure you pay your bills on time. Make the payments on your current mortgage and your credit cards on time. Your new mortgage lender will need to see that you have at least six months of on time payments on your record. Pay down the balances on your credit cards; better yet, pay them off and close the accounts. The less debt you have and the more money you have in the bank, the better.

Shop Around for the Best Mortgage

Refinancing your mortgage is simply taking out a new mortgage to pay off the old mortgage. Your poor credit rating will make refinancing difficult and you need to be flexible in the terms and conditions you are willing to accept.

Doing your homework will save you money on the new mortgage. Online mortgage companies make it easy to shop for loan offers. Brokers can help you find lenders that specialize in bad credit mortgage loans. To avoid making mistakes while shopping for you new mortgage, sign up for a free mortgage guidebook online.