Bad Credit Mortgage Refinancing

Debt is one of the major stress-causing problems in the United States these days. This is also one of the reasons why families disintegrate, friendships crumble, and personal economy regresses. Hoffman Brinker and Roberts published credit card debt statistics in their website, some of which are shown below:

  • The average credit card debt per household is about $15,700.
  • The US Census Bureau reports that U.S. Citizens have over $886 billion in credit card debt in 2010.
  • In 1990, the average household’s credit card debt was $2,966. In 2007, however, it went up to $9,480.
  • $59.1 trillion worth of liabilities was incurred by the U.S. Federal government which translates to roughly $516,000 per U.S. household.

This is how rapidly liabilities and debt increase every day.

Mortgage Refinance with Bad Credit

If you would take debt problems to a Financial Consultant, you will always be told that debts are byproducts of mismanaged finances.  How then can one recover in case he or she gets entangled in it? One option growing in popularity these days is bad credit mortgage refinancing.

Bad credit mortgage refinance is when one applies for a loan in order to pay off another loan secured against the same properties, assets, etc. It is effective only when the latter loan made is offered at a lower interest rate compared to the original loan.

There are quite a number of benefits one can get from refinancing:

  1. If the person in debt chances on a an institution which allows him to make a loan at a smaller interest rate compared to the original interest he pays over the principal loaned amount, it will eventually require him lower mortgage payment due to savings incurred.
  2. If the amount of money loaned from refinancing could pay off a huge portion of the credit, it shortens the payment period set for the original loan. For example, if the original loan was to be paid for the duration of 30 years, it may cut the period shorter and instead get it set at the duration of possibly 20 years.
  3. Depending on the situation, ARM (average rate mortgages) can be advantageous over FRM (fixed rate mortgages). ARM is good only if you are unsure about whether you will be using your property for a very long time, however, if you have plans to keep your property for a lifetime, a fixed rate mortgage may be more beneficial.

There are many more benefits on refinancing identified that you can read through. Further helpful resources are available also which can enlighten us about refinancing 2nd mortgage which offers fixed rate refinance loans, lower payments, and debt consolidation.

For small business proprietors who have experience bankruptcy, refinancing after bankruptcy programs can also help improve their credit scores. Doing that is difficult but doable. Difficult because you need lots of optimism and self-drive to bounce back from an adversity and it is doable because all you need is to begin building a good standing credit by starting a savings account and/or opening a new credit card account. You can start with minimum amounts and finding a good lender which offers refinancing at low interest rate. In time, you should be able to recover.

Bad debt and credit should not impair one from moving on. For as long as we are able to muster our will to move on, there will always be available alternatives around. Refinancing is a useful tool for the alleviation of our financial difficulties. Take advantage of the simple 3-step refinance guide to help you in making the best decision.


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