Bad Credit Mortgage Refinance - Should I, Shouldnt I?

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.

---

Mortgages - Which Loan is Right For You

When buying a home, you need to take a home... Read More

Home Loans and Mortgages ? Beware of New ?Mortgage Elimination? Scam

The booming real estate market has allowed many Americans to... Read More

What Is The Best Deal For A Mortgage?

Few of us invest the time and effort into researching... Read More

Construction Loan Basics

It might not be too big of an exaggeration to... Read More

Choosing The Right Buy-To-Let Mortgage

Buy-to-let took off during the 1990s with the increasing availability... Read More

No Money Down Mortgage Loans - Ways To Get Approved For a Home Loan Online With Zero Down

No money down mortgage loans enabled more people to own... Read More

Jacksonville Florida Real Estate Mortgage Home Loans - Get the Best Rate Everytime

There are hundreds of mortgage companies in the Jacksonville real... Read More

Reaping Financial Rewards ? Bad Credit Home Equity Loans

Home is the place you inhabit. It is the place... Read More

The Truth behind Pension Mortgages

A pension mortgage may seem lucrative at the first sight.... Read More

Home Buying ? What Can You Afford?

Okay, you've decided to buy a home and are trying... Read More

What Exactly is a Mortgage Broker and How Can He/She Help You Save Thousands on Your Mortgage?

Have you ever heard of a mortgage broker before? If... Read More

What is a Tracker Mortgage?

A tracker mortgage 'tracks' the Bank of England base rate,... Read More

Poor Credit Home Mortgage Loans - The Role of the FICO Score

If you have bad credit history and are looking to... Read More

Low Income Home Loans - FHA and VA Mortgage Loans Can Help You Get Approved

If you have low income and are looking to get... Read More

Securing the Best International Mortgage for Your Home in Spain

Are you one of a growing number of people planning... Read More

Home Loan Lenders - Finding the Best Home Mortgage Lender

The process of obtaining a mortgage or home loan can... Read More

Real Estate Mortgage Loans Online

Online real estate mortgage loans enable borrowers to be sure... Read More

Mortgage Broker or Assassin? A Banker Who Offers You This Loan May be Trying to Kill You!

What if a banker or mortgage broker told you he's... Read More

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for... Read More

Home Mortgage Loans For People With Bad Credit

Getting a home loan with bad credit has actually never... Read More

First Time Buyer Home Loans - Things To Consider When Applying Online

As a first time home buyer, there are several things... Read More

High Risk Mortgage Lenders - Using a Sub Prime Lender Online

Sub prime lenders handle high risk mortgage loans that traditional... Read More

Desperately Seeking Good Leads, The Adventure Driven Loan Officer

As loan officers, the word "lead" is by far one... Read More

First Time Buyer Mortgages ? Transforming Homeless into Property Owners

Having just settled in life, you are finding the rentals... Read More

Home Loans ? Would You Buy a Home Without an Inspection?

The housing market has exploded, with home prices rising beyond... Read More

Mortgage Brokers or Banks: Which is Right For You?

When you're looking for a home loan, you might work... Read More

Home Loans ? Lenders Continue to Offer High-Risk Loans

Home prices in the Untied States continue to soar, and... Read More

Life of an Escrow

Escrow is one of the last stages in the purchase... Read More

Is the Inverse Mortgage a Scam? New Program Promises Mortgage Payoff inside of 5 Years

If a mortgage could be paid off in five years... Read More

The Zero Down 80/20 Mortgage

This is an excellent loan for those that are lacking... Read More

Mortgage Loans Explained In Plain English

With the many different kinds of mortgage loans out there,... Read More

Home Equity Loan ? Beware of the lingering lien!

A problem that often arises when people try to refinance... Read More

Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders

Interest rates and fees vary between subprime lenders just like... Read More