It is a common financial scenario across households in the Western world. Multiple debts have started to build up: a car loan here, a department store loan there; a bank loan here and several credit cards there. While all may have seemed manageable on the optimistic day you took them out, or spent on them, suddenly you realise that you cannot keep up with the monthly payments. You miss out on a payment or two, and suddenly you have a bad credit record. A few more missed payments and you start to feel the pressure, so start thinking about refinance.
The silly thing is, in asset terms you are not poor. You have a home of your own; it is mortgaged, but you have plenty of equity. Now wouldn't it be great if you could get a new loan to consolidate those monthly payments and get your finances back in order? Well, maybe, you think, but can you get bad credit mortgage refinance?
What To Consider Before Seeking Bad Credit Mortgage Refinance
Any mortgage refinance package is not something to be taken lightly, nor without careful thought about the costs, consequences, and whether or not it is really necessary. What, then, do you need to consider before refinancing your debts through unlocking the equity in your home?
1. First of all, you need to make sure it is really necessary. You should take a long hard look at your outstanding debts. List them out, total the amounts owed, total the monthly payments, and total the amount in arrears. Your cheapest and simplest way out will be to put your current financial house in order without resorting to new, and possibly expensive, borrowing.
a. Look at some ways to clear those overdue amounts. By taking a critical eye to your home budget, your expenditure, see if there are any regular expenses that can be cut out or reduced. If so, take the necessary action and make sure that money goes towards reducing at least one of the outstanding debts where some amount is overdue. If you have several overdue debt repayments, and it will take a few months to clear the outstanding amounts with your newly released funds, write to the credit companies concerned and tell them what steps you are taking to pay off the over due amount. That may take the pressure off you a bit while you get things in order again.
b. Seriously consider how you can make some extra money. Will a few weeks' overtime, if available, help you clear the over due debts and allow you to get your finances in order again? Could you use one of your skills to earn some extra money part time? Remember, if you take no action at all, your financial situation will deteriorate. If it is possible to take some action that will eliminate your overdue debts without resorting to bad credit refinance, then the chances are it is worth doing.
c. Have a look around the house. Do you have any things you do not use, but are worth selling to clear some of those overdue payments? Do you have some old shares that you could sell, or an old savings account, with a healthy balance in, you've not touched for years.
2. You need to consider the other alternatives to bad credit mortgage refinance, especially a debt consolidation loan. Look around and get a few quotes for consolidation loans, ready to compare the results with a bad credit mortgage refinance option. Remember to make a note of the costs of each of the loan options, as this may affect your decision.
3. You have now looked at the possibilities of paying off your debts without resorting to a new loan or refinancing. If that came up blank, or insufficient, then now is the time to consider mortgage refinancing. Again, you need to shop around and get more than one quote. With a bad credit record, some lenders may try to get more money out of you than than is really justified. You have the right to get the best deal possible. Look very closely at the charges of the lender and broker, if there is one, and record them, ready to use them in your calculations to decide what option to take.
4. The final stage is to make a comparison between using bad credit mortgage refinance and using a debt consolidation loan. Really, you need to do this over the full term of the mortgage. What you will actually be comparing is:
The mortgage refinance costs, interest rates and repayments based on the the best quote you have had, with your current mortgage plus the costs of the consolidation loan. This is important, as the bad credit mortgage refinance loan may be at a higher interest rate than your existing mortgage. If you are not good with figures (many people are not so don't feel bad about it!), ask a friend who is to help you out, or if you can get free counseling from someone who can help you make the choice.
Once you write down all the figures, the choice will probably be clear. Remember, however, that with the option of keeping your existing mortgage and having a separate debt consolidation loan, once that consolidation loan is at the end of it's term, say 5 years, you will no longer have any repayments. That is why it is important to look at the whole mortgage period to make a comparison.
This bad credit mortgage article was written by Roy Thomsitt, owner author of the Eliminate Credit Card Debt Now website.
A Self-Certification mortgage is a mortgage designed for people who... Read More
The housing market has exploded, with home prices rising beyond... Read More
A home equity loan can help repair your poor credit... Read More
Refinancing your debt via a home equity loan shifts your... Read More
You've been looking at houses for months, and finally you've... Read More
Presently council tenants are able to purchase their rented property... Read More
There are several reasons that might make someone consider refinancing... Read More
There are great mortgage loans for people with poor credit,... Read More
The popularity of stores like Home Depot and Lowe's show... Read More
Help is available to borrowers who have claims against their... Read More
Mortgage advice overwhelming you? Many people get advice from everyone... Read More
Whether you are just moving out on your own for... Read More
When the bills are piling up and there doesn't seem... Read More
When you refinance your home mortgage, lenders often tempt you... Read More
You can buy a home with a bad credit record;... Read More
Some people in the real estate industry have a terrible... Read More
Why is it that some homes sit on the market... Read More
Refinancing your home equity loan is an excellent way to... Read More
Reverse Mortgages, Most Common Features:Many offer special appeal to older... Read More
Since the demise of the stock market in 2000, the... Read More
Recently I was driving in my Car and I heard... Read More
It is a common financial scenario across households in the... Read More
Are you thinking of buying a home? If so, then... Read More
When it comes to American spending habits, the sad truth... Read More
Most people choose a home owner loan as it can... Read More
If you're thinking about taking out a home improvement loan,... Read More
This might not be the front page news but it... Read More
Refinancing vs line of credit are two popular options you... Read More
Home prices in the Untied States continue to soar, and... Read More
Applying for a subprime mortgage loan online can seem intimidating... Read More
Mortgage elimination programs are all the rage these days. In... Read More
Faced with the threat of a foreclosure on their home,... Read More
A mortgage is borrowing money using property as a security,... Read More
From time to time, we hear a story about a... Read More
For the first time since May 1996 reports have indicated... Read More
Home equity loans give individuals a tool to extend their... Read More
Getting a home loan with bad credit has actually never... Read More
You're considering refinancing your home mortgage loan to save money.... Read More
Using a home equity loan really depends on what your... Read More
Lots of articles have appeared recently about the booming real... Read More
Online real estate mortgage loans enable borrowers to be sure... Read More
When you need a mortgage -- either because you are... Read More
"You can save time and money by applying for a... Read More
Interest - is an amount you pay for the use... Read More
What is a mortgage? Here's what The New Merriam ?... Read More
This is a guide on how to get the best... Read More
So you've finally decided you've had enough of paying rent... Read More
Being self employed has many benefits. When you are self-employed,... Read More
The answer depends on several factors including your financial situation.... Read More
Home is the place you inhabit. It is the place... Read More
Man has been known for continually simplifying things in his... Read More
Buying a home remains the great American dream. Home ownership... Read More
Mortgage rates can either be fixed for the duration of... Read More
Getting approved for a jumbo mortgage loan online is similar... Read More
If you're thinking about taking out a home improvement loan,... Read More
It takes a mighty big effort to secure a home... Read More
Today's real estate market is a volatile one; prices are... Read More
The quest is on! You're in the market for a... Read More
Before you apply for a hard money loan, try applying... Read More
Refinancing vs line of credit are two popular options you... Read More
Interest rates are on the rise and many home owners... Read More
How To Release Equity Locked Up In Your Home For... Read More
Most people choose a home owner loan as it can... Read More
Before you start looking for a home, figure out what... Read More
About 29% of current homeowners and a much larger percent... Read More
If you are wanting to get a home equity loan,... Read More
Mortgage Refinance |