Bad credit mortgage refinance is used to help homeowners fix two different problems. Here, we discuss bad credit mortgage refinance, and the options homeowners have:
The First Problem Mortgage Refinance can Fix
A homeowner has a bad credit score, high interest debts, and a home which they have built up equity in. This homeowner can use the equity in their home and pay off their high interest debts by refinancing and getting cash back from the equity. Even though the interest rates you get with a bad credit mortgage refinance are typically higher than the average, they are often always lower than credit card interest rates. So, your total payments to debts should be lower every month, and you can improve your financial situation.
When a homeowner refinances in an attempt to get cash back and pay off other debts, this is called a debt consolidation loan.
In order to do this, the homes market value must have improved, in order to get a higher amount loan than you have now, if you don?t have enough equity at least.
There are several advantages to getting a refinancing, even with not so good credit. The mortgage length can be extended, making the payments lower every month. As said earlier, even though sub prime mortgage rates are higher than average mortgage rates, they are almost always lower than credit card interest rates. So a homeowner can refinance, pay off other debts, and still save money every month. Otherwise foreclosure, or defaulting on your mortgage are going to be the next step.
Homeowners who want to get a debt consolidation loan with a bad credit home loan refinance need to know the importance of actually using the money to pay off your debts.
Free credit counseling is always available from HUD to help prevent homeowners from continuing in their poor credit making decisions.
The Second Problem a Bad Credit Mortgage Refinance Can Fix
Sometimes homeowners have bad credit when they are purchasing their home, and had to get a high interest sub prime mortgage. Since then, sometime has passed, all payments have been made in full and on time, and you are now eligible to get a lower interest rate through mortgage refinancing into a conventional loan.
However, you should know that even if you have remained perfect on all credit issues, a refinancing with less than perfect credit may not be possible into a conventional loan, and a sub prime loan will be needed.
Getting a Bad Credit Mortgage Refinance is a good idea is these statements are true:
1)The new mortgage will have an interest rate which is 2% or more lower than your current home loan.
2)You plan on living in your home for at least 36 months, possibly more.
Source: http://www.maysabelnyo.com/bad-credit-mortgage-refinance-tips-and-advice.html/
ohio state vanderbilt tony bennett miami hurricanes boise state football boise state football costumes
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.