Q: We bought our house in march of 1999. We have an interest rate of 10.94 and we would like to refinance before 3 years because we only have a three year fixed rate. Our credit has only slightly improved since we bought the house and we wonder if we could refinance with anyone before March of 2003. Our loan amount was 79,900. We still owe 78,500 and our house appraised at 89,900 when we bought the house. I believe our credit scores are around 560 and 580. We are just trying to figure out our options before our payments go up after March, we already pay 759.19 a month and can't really afford a higher payment.

Thank You, Kelly

A: Dear Kelly:

I think that you should definitely speak with a qualified mortgage consultant about your situation. Since you purchased your home there have been a number of new loan programs that have become available for people with less than perfect credit. Your interest rate of 10.94% seems a bit high, even if you have missed a few payments. With credit scores in the mid to high 500's you should expect to pay a higher rate of interest than the 6% loans available now. However, you should be able to qualify for a lower rate; saving you quite a bit per month on your mortgage payment. Most less than perfect credit situations are unique; so I would suggest that you find a loan officer that has extensive experience in sub-prime loans. That way you can make sure that you get the best deal possible. If you would like, call or send me an email and I can refer you to a sub-prime specialist that can discuss your options with you.

Thanks, Jerry