If you have a bad credit rating and are looking to refinance your home mortgage the refinancing process may not be as easy as it could be. However, these days there are a lot of mortgage lenders who cater to people with bad credit scores. That means that even with your bad credit you can still refinance into a better mortgage rate, or even perform a cash out refinance.
There are a lot of good dedicated lenders and banks who will do their best to help you refinance into a much better mortgage, regardless of your credit rating. Do not let bad credit prevent you from saving money through refinancing. Although it may cost a little more and require more patience and research it is definitely possible. You are not the only homeowner with bad credit who needs to refinance.
If you can refinance at just a 1% lower mortgage rate (hopefully more) you most likely can save money. This money can be used for anything you want but obviously should be used to better your financial future and credit rating. You can also use the equity you have built up in your home and do a cash out refinance. For example, if you owe $50,000 on your mortgage in 10 years and your home is worth $150,000 you can refinance into a mortgage that is worth $80,000 over 20 years and pocket the difference. This should only be done if it is properly researched and you take your financial future into serious consideration. Owning your home should always be the number one goal you have.
Most likely, your home mortgage is the most expensive payment you have. Refinancing it can be a huge money saving thing to do if you do it properly. However, if you refinance wrong you may lose thousands of dollars. Research potential bad credit mortgage lenders, and companies that specialize in bad credit mortgage refinancing. Once you get a mortgage quote you like shop it around to other potential mortgage lenders.
This increases your odds dramatically of that lender meeting or beating the quote you showed them. Especially when refinancing with bad credit be sure to take your time and be patient. It is very likely if you do research and make sure you comparison shop mortgage quotes you will save money every month on your mortgage.
By: Michael Petrone
Bad Credit Refinancing – Making An Informed Decision
February 6th, 2010 by admin No comments »
Refinancing as a way to improve a bad credit situation is nothing new. What is new is the range of refinancing options now available to homeowners. Here are the three most popular types of non-traditional bad credit mortgages:
1. Interest-Only Mortgages allow homeowners to pay only the monthly interest due on the loan for an initial period of time, usually from three-to-ten years. After this, the payments go up to cover both principal and interest for the rest of the mortgage term.
2. Negative Amortization Mortgages can have even lower initial payments because they let borrowers pay less than the interest due on the loan, with the unpaid balance being added to the principal. This means the amount owed on the mortgage actually increases rather than decreases over the years.
3. Option Payment ARMs let homeowners choose the type of monthly payment they want to make. The options include an interest-only payment; a minimum payment that doesn’t cover the principal and interest due, (see above); or a payment calculated to pay off the mortgage in either 15, 30, or 40 years.
Fixed-Rate or Adjustable-Rate Refinancing
CNNMoney.com senior writer Jeanne Sahadi points out that, “Rarely has there been such an advantageous time to refinance into a 30-year fixed-rate mortgage if you have an adjustable-rate loan. But homeowners’ love affair with riskier ARMs is still strong . . . One in three homeowners refinancing today is choosing the financially riskier interest-only and payment-option ARMs, according to data from Loan Performance.”
Learn how to save money on bad credit refinancing, and get a free loan quote at Easy Second Mortgages [http://www.easysecondmortgages.com]. Find out how much you could be qualified to borrow and what your monthly payments might be. The information you provide will not be shared or sold but will only be used to prepare your free quote.
By: Mike Hamel