Refinancing with Bad Credit

With an all-time low in mortgage rates, refinancing offers are being snapped up left and right. Everyone is taking advantage of the appealingly low rates in order to get new loans with better terms. Of course, the ones having the time of their lives are the people with good credit scores. Refinancing with bad credit is often thought of as a horrible deal. For the most part, it’s true.

Can I Refinance with Bad Credit?

Yes, of course. Banks are all about the business. Refinancing is merely one part of it and they will never say no to your money. Most people who try to refinance with bad credit scores end up turning away after being shown just how high the fees or points will have to be in order to accommodate their needs. Ordinarily, brokers or lenders would be offering people with bad credit high rates on loans. However, with mortgage rates so low on the market, they’ve also decided to take advantage of people’s willingness to reduce their home and auto loans. What’s a little fee for the chance to get better terms and potentially huge savings on payments? Nothing except for the part where the fees are actually pretty high. Still, it isn’t impossible to get a good deal.

Refinancing Home Loans and Auto Loans

In general, the two most common loans that undergo refinancing are the ones for your house and your car. A home refinance with bad credit will cost you more than normal but an evaluation of future payments might make you realize that it will all be worth it in the end. The same goes for a bad credit auto refinance. If you have mortgages for both, though, it would be wise to choose only one to refinance. High rates and fees will be hard on you especially since other loans will also be affected by your bad credit. Calculate the total savings for each kind of loan and take into consideration just how long it will take until your refinancing costs break even with your saved mortgage payments. It is entirely at your discretion which mortgage you’ll refinance. If you can’t decide but are still confident about your math, you can always go for both.

How to Refinance with Bad Credit

The key to success in this area is persistence. If you look hard enough, there will be a bank or some other financial institution with an offer of pretty reasonable deals. Shop around different banks, their rates will vary but you’ll be able to draw a baseline of what’s a good offer and what’s not. These aren’t the old days where they’ll just turn you away for having bad credit. Some banks actually cater to individuals with bad credit scores as this means that high rates or fees won’t be a problem come agreement time. There are even lenders with ‘subprime’ rates that specifically go after people with bad credit. A refinance guide is nothing without instinct. Choose wisely and you may be able to refinance your mortgage without too much trouble. Or, at least, with less trouble than what you were expecting.


One Response to “Refinancing with Bad Credit”

  1. bonniestorrier on October 12th, 2011 11:44 am

    all we want to do is lower our morgage payments so we dont loose what we have its a mobile that sits on 14 acres i have acredit score of 501 my husband has a score of 580 and know one will help ya i maybe middle class who both of us work to support our kids and try to ive them a good life but if your not wealth and dont hve a perfect credit score noone wants to help. well maybe its time to start helping is little people and let the wealth get treated like the middle class and see how it feels.