a common question among homeowners looking to refinance is, "Can I refinance my mortgage with bad credit ... and if so how ?"
The short answer is yes, certainly you can refinance your mortgage loan with bad kredit.Više answer is that you have to go about things differently than a homeowner with good credit. And you will need to ensure that mortgage refinancing makes financial sense, considering your bad credit situation.
We'll talk about refinancing a mortgage loan with bad credit in time. But first, let's talk about the reasons why people refinance in the first place. Everything will make more sense if we start with that.
home refinance Why?
mortgage refinance is always a popular topic among homeowners. Many owners feel the lure of lower interest rates and try to refinance their mortgages in order to capitalize on lower rates. If done correctly, the refinancing process can lead to significant savings over the life of new mortgage loans. Another reason people refinance is to cash out of their home. This is known as "cash-out refinance ."
mortgage refinance Benefits - It's time for math
In deciding whether or not to refinance a mortgage, you have to do a little math. Fortunately, there are a lot of mortgage refinance calculators online to help with this process. We are one such calculator our resources section. Basically, you want to make sure that you save money over the life of the new mortgage (when refinancing) exceeds the amount you pay for getting a new loan (closing costs). If not, it really does not make sense to refinance.
Bad credit refinance
Ok, so now we know the basic deciding factors for refinancing. Now let's talk about ways to refinance mortgage with bad credit. The most important thing to keep in mind is that the interest rate on your new mortgage loan (the refinance) will not be as low as you would for a homeowner with good credit. Thus, the same basic math applies -. You should calculate the savings after refinancing at the interest rate you qualify for, and see if those savings exceed the amount you pay to refinance mortgage loans
That's really all it is. Just remember this. When deciding whether or not to refinance your mortgage with bad credit, you must get all the numbers in advance, in order to do the math. Learn (A) What is your closing costs will be on a mortgage refinance, (b) What interest rate you will qualify for, and (C) how long you have to make payments in accordance with the new interest rate, so the total savings exceed your closing costs.
protect ourselves
Some argue that mortgage lenders specialize in bad credit mortgage refinance loan. Most of this is legitimate, but a few companies out there use a bad credit situation as a way of taking advantage of borrowers. In the mortgage industry, and is referred to as predatory lenders. No, you can protect yourself from such unethical lenders continuing their mortgage refinance education, asking the right questions, to math up front, and getting everything in writing!
I hope you have enjoyed this short tutorial on mortgage refinancing with bad credit, and I wish you the best with your financial future.
* You May republish this article online if you retain the author byline and the active hyperlinks below. Copyright 2007, Brandon Cornett.