How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Rakhi Vasavada Your Own Question
Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2572
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946
Type Your Finance Question Here...
Rakhi Vasavada is online now
A new question is answered every 9 seconds

I have a credit rating of about 720 which took a big hit due

Customer Question

I have a credit rating of about 720 which took a big hit due to a foreclosure in 2013. I have a parent plus loan that I would like to refinance to get interest rate and payments down. I will also be relocating in the next few months to a different state.
Should I wait to refinance the parent plus loan until after qualifying for a new mortgage or should I refinance now? What effect will refinancing have on my credit score? And what effect will the resulting change in payments have on my qualifying for a new
mortgage or lease?
Submitted: 1 year ago.
Category: Finance
Expert:  CFEPro789 replied 1 year ago.
Credit score calculation formulas are proprietary, so nobody knows exactly what effects them when it gets down to granular questions like this. However, a 720 is still a good credit score and typically anytime you pay off a debt (even if its through a refi and then you take out the same debt again), it is favorable to your score. In your case, you woudn't be adding any new debt so I see no issue with the refi now. If the payments are lower, they will increase the amount you can borrow through the mortgage bc your debt payment to income ratio will improve. My advice is to refi now and don't wait if you have an opportunity to lower your payments, the student loan refi won't have any negative impact on your mortgage, if anything it will help.
Customer: replied 1 year ago.
Okay, thank you. That is basically what I was hoping to hear.

Related Finance Questions