Refinance Mortgage Loan With Bad Credit

Written by Beth Hrusch
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Bad credit does not automatically mean that you cannot get refinancing on your home loan. Some lenders are familiar with higher-risk lending situations and can help negotiate a deal that will help the borrower get out from under a high interest rate. After all, whether you have good credit or bad, the purpose of a refinance is to save the homeowner money over the term of the loan. Careful consideration of the costs involved in refinancing will put you on that road.

Bad Credit Mortgage Refinancing

Lenders who deal with bad credit or past bankruptcies look at the extent of the credit damage and the mortgage repayment history before offering a deal to the borrower. If the current home loan is being paid back on time and as agreed, then there is a good chance that homeowner can get a refinance loan at good terms. If there have been missed or late payments, then the lender will be reluctant to offer a low interest rate on the new loan.

Higher interest rates and fees can sink a bad credit refinance deal. If they outweigh the advantage gained with a lower rate then the refinance will not make sense. An experienced lender or broker can help determine if a refinance loan is wise, given the credit and payment history of the borrower. If an effort is being made to repair bad credit, then refinance mortgages are available that will help the homeowner rebuild credit and save money on his home loan.

Bad credit may make getting the best loan more difficult but not impossible. Creative financing solutions are often just a call away. Lenders who deal with bad credit every day know how to navigate these waters and can present the options, enabling the homeowner to make an informed decision.


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