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Bad Credit Mortgage Refinance – Lowest Rates Available For You?

Posted on | October 5, 2009 | No Comments

Getting a bad credit mortgage refinance has been on the mind of many home owners during the current recession.  Getting the lowest rates possible is something that every borrower desires.  Having a mortgage rate that is a full percentage point than your current rate could end up saving you several hundred dollars a month on your home loan.  This could go a very long way in paying off other debts and bills.

Having bad credit is something many home owners have had to deal with of late.  Prior to 2006 it was not a huge issue to have bad credit because the value of homes was increasing so much that you could just refinance and take the money earned from your home to pay off debts.  This was happening all too often in the United States and when the value of homes started to drop home owners were in a very bad situation.

If the value of your home is declining and you expect to pay off debt with the money you make on refinancing you are out of luck.  There were many people that were building up tens of thousands in credit card debt “knowing” that they could pay it off in January when they refinanced.  When they tried to refinance in January of 2007 they found out that they would make no money refinancing.  What were their options now?

In all reality, the only option they had was to get a second, third or forth job to help pay off these debts.  Unfortunately the job market turned south and everything that could go wrong did go wrong.  Now these home owners are in $50,000 of credit card debt, their home value is decreasing and they cannot get a second job to pay off bills.  This is home owners in every neighborhood in America right now.

The one saving grace now is that mortgage rates are very close to an all time low.  The problem is that lenders have become quite strict with their practices and it is harder qualify for these low mortgage rates.  If you have bad credit you often need to consult a bad credit lender as some lenders do not want to take on the risk of another mortgage default by refinancing someone’s home mortgage who is at severe risk of defaulting.

Please make sure to return to Subprime Blogger for all your mortgage and financial news. To stay up to date on the current state of finances make sure to bookmark the current news category below. We offer information on everything from getting a lower mortgage rate to increasing your credit score.

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Author: Heather Best

Category: Bad Credit Mortgage Refinance

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