Even if you have bad credit, mortgage refinance is possible and is often advisable. In today’s world with the downturn in the economy, many people are finding their financial situation has changed drastically from when they first took out a mortgage and purchased a car. The monthly payments add up to more than the income and as a result they have a bad credit rating because of late or missed payments. While all the loans were manageable at the time, various influences such as divorce, illness and job loss have impacted seriously on the amount of money available in the household.
The thing is when you own a home, even though you have bad credit you still have assets to use as collateral. Even though you have a mortgage on the home, if you’ve been paying on it for a while, you have equity. However, even with that knowledge, you should not jump into a bad credit mortgage refinance without careful consideration.
If you have only had your mortgage a few years, you may not be able to qualify for a home equity loan. Take a long hard look at your financial situation to determine whether or not refinancing is right for you. When you total your debts and consider how much you are in arrears, you can start making changes to your spending habits to clear up the bad credit. Mortgage refinance is a big step to take and it will add another item to your credit report.
Always do your due diligence. Use the Internet to perform research and to compare rates from several mortgage lenders.
Richard Cunningham is a successful entrepreneur and publisher of several profitable websites on Homeowner Insurance , Bad Credit Mortgage Refinancing , and Apartments for Rent