Bad credit refinancing » Loan Options

Should I Refinance My Mortgage? Take a Quick Quiz to Help You Decide

admin — Wed, 28 Apr 2010 23:47:52 +0000

As reported in the media recently, the values of homes continue to decline to lower levels than previous years and mortgage rates have dropped. This has made many homeowners ask themselves, “Should I refinance my mortgage or not?”

Under today’s conditions, the fact remains that those who do prepare for declining home values will reap big dividends. For example, if the value of your home declines below your current mortgage balance, you may not be able to refinance in the future. Keep in mind that refinancing should put you in better financial position. There are many questions that you should ask yourself before considering to refinance. Take a quick quiz to help you decide if now is the right time to refinance.

The Refinancing Quiz
Would you like to lower your monthly payment? Are you interested in saving thousands of dollars in interest? Do you have debt to consolidation into 1 easy lower payment other than making many monthly payments? Do you have an adjustable rate mortgage or high rate fixed rate mortgage that you would like to change to a secure a low fixed rate? Would you like to opportunity to pay your loan off faster than the original 30yr., 20yr., or 15yr. term? Do you need to get cash from the equity of your home for improvements, college, or vacation?

Add up the number of times you answered YES to a question and see where you fall in the scoring guide below.

Refinance Scoring Guide

0-1 No. Put off refinancing to another time.

2-4 Maybe. Consider a mortgage analysis in the near future. Now might be a good time to refinance and put you in a better position.

4-6 Yes. Speak with a mortgage professional soon to review your loan options before interest rates change.

This should have given you a good idea if refinancing is a good option for you. If you scored between 2-6, consider a mortgage analysis from an experienced mortgage consultant. However, before you get started, a lender might want to charge you an upfront application fee before they review your credit. You might not even qualify for a loan at the time. If not, you might lose your application fee which can range from $300-$400 dollars. I recommend working with a mortgage professional that does not require an application fee before reviewing your credit report. Once you have picked a mortgage professional, now you are ready for your mortgage analysis.

A mortgage analysis is a very simple process and it only takes about 10 -15 minutes. The mortgage professional will ask you questions about residency, employment, income, assets along with reviewing your credit report. Shortly after, you should receive a customized proposal of your refinance loan options. Once you receive your results of the analysis, compare it with the results from your quiz above. At this time, you should have a better idea if refinancing is right for you. If you are still unsure, meet with your mortgage professional to explain your options further.

By: Chris Butcher

Bad Credit Home Loan Refinance – the Way to Help You Financially

admin — Fri, 12 Mar 2010 14:19:21 +0000

It is an undeniable fact that recession has ruined the economy worldwide. Let it be the sector of Information Technology or automobiles, every where slower economy has made people seeking for loans. Yes, due to the worst face of inflation, more and more people are looking for the supportive hands to get their financial needs fulfilled. But, is it really possible especially in terms of present market situation? Well, of course it is!

Even many lenders are providing the loans at quite considerable interest rates to the people, who are good at their credit ratings. But, does the same apply for the persons with bad credit? Well, up to some extent. That’s why it is beneficial for such people to look beyond the boundaries and approach bad credit home loan refinance.

As the name shows, these loans are meant to provide financial stability to those who acquired home loans, but couldn’t pay that due to some reasons. Although it sounds something strange to have such kind of loan options available, but tough competition is something which has made it possible. Now, surely, you must be wondering how can it be possible? Well, due to inflation, many people were unable to pay their loan installments timely, but does it mean all of them did the same knowingly? Absolutely not!

Although traditional lenders are not concerned with this fact, but newly emerging money lenders have accepted this fact. And that’s why they are ready to help out the people who are trapped into the hands of bad credit. But, are they really being very kind to you? Well, as mentioned earlier, recession has influenced the growth rate of finance sector as well. That’s why it is getting harder and harder for lenders to survive which has made them look for some out of the box approaches to lend the money. And this has lead to the emergence of bad credit home loan refinance.

By: Alan Lim

Tips to Consider While Approaching Bad Credit Mortgage Refinance

admin — Fri, 05 Mar 2010 09:07:39 +0000

Are you looking for a bad credit mortgage refinance? If yes, then here are some guidelines which you must bear in mind before you apply for such a loan.

Devote The Time

Always remember that you are having a bad credit history. That’s why it is an obvious thing for the lenders to think well before dealing with you. So, even if your loan request is declined, don’t get dishearten. These days, ample of financial institutions are in existence, which offer various loan options for the persons with low credit ratings. However, finding such a loan provider requires you to devote considerable period of time.

Make A Proper Research

Now, when you are free from all your works, it’s time to make a deep research about the top lenders. However, you must consider the fact that everything that glitters is not gold. The same thing applies in the case of money lenders. A good money lender is one who interacts gently with you. Having bad credit history doesn’t mean that you are good for nothing. At any instance, if you find the lender behaving in wrong manner with you, there are still other options waiting for you to switch upon.

Don’t Agree To Unusual Conditions

Although it is a tough time for you and you are in keen requirement of the finance, never let anyone to make the most out of it. Don’t agree to any unusual condition of the lenders. For instance, you may be required to pay higher interest rates. Or you may be asked to purchase any other additional insurance policy etc. But, are you in need of all of them? Absolutely not! Therefore, it would be a wise decision to say goodbye to such lenders.

Find The Appropriate Loan Specialist

A loan expertise can easily take you through the hard core formalities of bad credit mortgage refinance. In addition, these loan specialists know how to negotiate with the money lenders. So, you are assured to get cheapest interest rates while dealing with them.

By: Alan Lim

Bad Credit Mortgage Refinancing and Modification

admin — Wed, 24 Feb 2010 23:10:49 +0000

While getting approved for a mortgage refinancing or modification with bad credit may be hard, it is not impossible. These days there are plenty of mortgage lenders and banks who are happy to have you as a customer, but sometimes these come with a price. Homeowners with bad credit need to know what to do in order to ensure the best refinancing or home loan modification deal possible. Here are some things that can help you if your facing this situation:

- Homeowners with bad credit need to make sure that they compare different loan options, rates, terms, and conditions between different lenders and banks. Typically, you are going to pay a higher interest rate due to your bad credit, so saving as much as you can is a great way to maximize your benefits.

- Homeowners need to know what they want to get out of a refinancing or mortgage modification. Do you want lower payments? To shorten the length of the loan? Get cash back from the equity you have built up? Lock in a lower interest or fixed rate loan? All of these questions will effect the decisions and options you have.

- Homeowners who are unable to get approved through a traditional mortgage lender or bank may need to use the services of a sub prime mortgage lender. While the loans these lenders are able to provide are often at a higher interest rate, they are often times a homeowners only chance at getting approved for a bad credit mortgage refinancing.

Banks and mortgage lenders would rather help you than let you lose your home to foreclosure or mortgage default, especially in this economy. Homeowners who know they are going through hard times, or have already missed or been late on some mortgage payments, should take action now. Even with bad credit, it is entirely possible to get a beneficial home loan modification or refinancing, and change your financial out look for the positive.

By: Michael Petrone

Bad Credit Refinancing Success Guide-What You Can Do To Improve Your Chances & Loan Options

admin — Mon, 08 Feb 2010 23:51:48 +0000

Unless you have shopped for a mortgage in the last 3-6 months, be ready for a rude awakening if you are seeking a lot cost effective alternatives for bad credit refinancing—over 70 bad credit lenders have gone bankrupt since the beginning of 2007 & many of the programs that once assisted for bad credit refinancing have been changed or discontinued altogether.

Although significant changes have been imposed to bad credit refinancing guidelines, there are number of things homeowners can do to improve their chances of getting a good deal on bad credit refinancing—consider the following before applying for a bad credit refinance mortgage:

1). Attempt to clear up any past due or outstanding amounts on any of your open revolving/installment accounts. By bringing any outstanding or past due amounts current, you will stop your FICO scores from dropping any further, potentially improve your credit scores (if you are making significant changes to the outstanding balance to available credit ratio), potentially improve your DTI (debt to income) ratio for loan qualification and hopefully demonstrate to the your future lender that you are an “honorable” credit risk worthy of consideration.

2). Attempt to pay down the outstanding balances on any of your open revolving/installment accounts. By reducing your outstanding credit debt, you have the opportunity to increase your scores, improve your DTI ratio and increase your chances of meeting the front end/back end ratio guideline requirements subscribed to by most lenders. Making any contribution to debt reduction will have a positive effect on the issues outlined above, but to bring about significant and dramatic change, one should strive to reduce their overall outstanding balance to available credit ratio to 30-35% (example—if you have a credit card with a credit limit of $1000 with an existing balance of $600, your current outstanding balance to available credit ratio would be 60—in this case, you would need to make a payment of $300 to bring about the desired effects to your credit score and DTI ratio).

3). Accelerate the payoff of debt. Aside from the residual benefits you would receive to your credit score and DTI ratio (as outlined above), the added benefit to an accelerated debt reduction plan is an increased purchasing power (with less debt, you could afford to allocate more to housing).

4). Invest time or money (or both) in credit repair. Did you know that according to recent surveys, 1 out of 4 credit reports contain errors—these types of errors could be on your credit report and could potentially be affecting your credit score. Review a recent copy of your credit report long before you consider bad credit refinancing—check it for accuracy, omissions or falsities. If you should find problems, dispute them immediately—dispute submission & resolution can be done by yourself, online or outsourced to a third party. Don’t let wrong information on your credit report give the “wrong” impression to your future lender.

5). Adopt a good credit score. Did you know there is a simple way to get a better credit score, that requires a fraction of the time, effort or money used in some of the strategies outlined above? Become an authorized user. Ask a family member, relative or close friend (that has credit accounts that are both in good standing & at least 2 years old) to add you to their account as an authorized user. By doing so, you will “adopt” the payment history, credit history and good standing of this credit reference and your scores will improve because of it.

6). If you have been employed by the same company for more then two years and are considering a job change, stay put until after the refinance is done. Most conventional loan programs require 2 years of steady employment to be considered eligible—although there are programs that will overlook this matter, the terms and or conditions will be less desirable when compared to those offerings made to individuals with steady employment histories.

7). Don’t make any major purchases (like buy a new car) or add new debt to your credit accounts until after the refinance is done. Believe it or not, a lot of loans fail to materialize because of this—adding new debt effects your DTI ratio and will reduce the mortgage amount you can afford in the eyes of your future lender. For those that don’t have the time, money or inclination to undertake the task of implementing one of the above strategies, there are two more strategies for you:

8). Review loan programs that don’t base their rates/terms on your credit score.

9). Review programs that allow non-owner occupied co-borrowers. Despite all the changes in the lending industry, there are still good loans for those interested in bad credit refinancing.

Programs containing the following features/benefits:

- Not predicated on your credit score (this program has assisted with the bad credit refinancing of homeowners with FICO scores as low as 400—this program can even be used by those that have no credit scores).

- Allow you to refinance up to 95% of the current value of your home.

- Don’t require all collection accounts/liens to be paid off, funds to close can be gifted from a relative, family member or friend or granted by using a down payment assistance grant from a non-profit organization.

- Can finance the cost of energy efficiency improvements without the need for additional qualification.

- Tolerant to derogatory credit and past credit problems.

This program also allows for the use of a non-owner occupied co-borrower (that has a better credit history, score, DTI ratio) to go on the mortgage with you to assist you with in qualifying you for a better mortgage/lower interest rate/a more desirable loan program.

By: H. Scott Miller

Options For Getting A Mortgage With Bad Credit

admin — Sat, 06 Feb 2010 09:21:18 +0000

In a perfect world everyone would have a 720 credit score and a trouble free credit history. Unfortunately we live in reality and the truth is that many home owners have less then perfect credit scores. While bad credit can make refinancing a home loan difficult getting a mortgage with bad credit is actually easier then you think.

The first thing you must determine is how bad your credit actually is. Knowing your credit score will help determine your loan options and save you the headache of having to apply for a mortgage only to be turned down.

Bad Credit Refinance Options

If your score is 600 or higher then you more then likely will be able to secure a good low fixed rate FHA mortgage. Keep in mind that FHA requires your last 12 months mortgage payments to have been paid on time and your debt to income ratios need to be at or around 42%. FHA will refinance up to 97% of the value of your home so it works well for people with little to no equity in their primary residence.

If your credit score is under 600 and not below 500 you really have no other option but to use a sub prime lender. although they have gotten a lot of bad press lately sub prime loans can help people refinance their homes when other lenders turn them away. However never under any circumstance take a sub prime adjustable mortgage and always opt for the fixed rate. Sub prime loans allow you to refinance with mortgage lates, open collections and many other derogatory credit situations.

However if your credit score is under 500 you have some serious work to do because even sub prime lenders will not lend to borrowers with credit scores under 500. At this credit score level you have two options. You can either invest some time and money into credit repair to improve your scores to the level where you can secure sub prime financing. The other option is for you to use a hard money lender. Hard money lenders typically have very high interest rates and loan fees and should only be used as a last resort. They also only typically lend up to 70% of your homes value so they may not be able to help everyone based on those equity requirements.

By: Darin Sewell

Bad Credit Refinance Options

admin — Wed, 25 Nov 2009 07:10:06 +0000

Benefit

Refinance opportunities for people with challenging credit come in two main areas:

mortgage lendershard money lenders New Loan Options One of the most critical factors helping someone with bad credit is equity in the property.

If there is enough equity in a property then lenders will look much more favorably on a borrower with bad credit. For example. if the property is worth $300,000 and the mortgage is for $150,000 the borrower will have many lenders looking at their loan favorably.

Some lenders have not required a credit score if there is enough equity in a property (this is when a person owns more than 40% of the value of the property).

Hard Money Lenders

Hard money lenders offer loans for people who can’t be approved by regular lenders. People turn to hard money lenders because of the speed of their decisions and their flexibility. They can look beyond credit situations and look at the bigger picture. Hard money lenders usually also require a lot of equity.

Co-Borrowers

Some borrowers choose to include a new co-borrower on their application who has a higher credit rating. A borrower who is on a loan application but who does not live in the property is known as a “non-resident co borrower”. Some lenders allow this, and some lenders will not. It also depends on what type of loan the borrower is looking for.

Often times a lender will figure out a borrower’s debt burden after their credit card and other debt is paid off through a refinance.

By: Ben Afzal