It’s hard enough to get a good to refinance mortgage rate when you have good credit. What happens when you have some bad credit? You may have trouble getting a refinance.
Refinancing, or a second mortgage is a loan that is taken out to repay the original mortgage. It’s usually a better option than taking out a home equity loan. With a second mortgage, you can pay off your debts faster and be rid of the risk of going into debt. If your first mortgage is currently for much more than what you can afford, this is a great way to borrow money to make ends meet.
But how do you get a second mortgage if you have bad credit?
This is a question that a lot of homeowners are facing these days. Some people may even be contemplating bankruptcy.
First off, you don’t need to file for bankruptcy just because you have bad credit. Just the fact that you have bad credit will not prevent you from getting a refinance. You just need to figure out why you have bad credit.
Maybe you were delinquent on your bills, or maybe you defaulted on your car or mortgage. Whatever the reason, you need to find out what options you have for getting a refinance approved.
Most people don’t know that they can consolidate all of their debts into one loan with a bad credit mortgage. This means that you’ll only have to make one payment each month. In most cases, this is less than if you were to have multiple loans on your credit report.
Of course, some of the reasons that someone with bad credit would have to consolidate are because their loans are too old, or because of the time that it takes to pay off their loans. It’s a good option for anyone who has many debts that they need to settle in order to make sure that they can afford to make all of their payments each month.
Once you have taken care of your debts
you want to do everything in your power to avoid going into debt again. You want to save up for something big and there are many ways that you can save for that “something big”.
One way that you can do this is to put away a few small payments each month and use them to buy a new car or some other thing that you want. If you don’t want to do something extravagant, then you can go to the mall and pick up some candy or watch a movie with your family.
If you are working with a lending institution, and they want to approve you for a refinance, you will find that they will be more than willing to work with you. They may ask for a certain number of closing costs or other things in exchange for a lower rate. You don’t want to be haggling, but they may be willing to work with you.
So if you have bad credit
There are things that you can do that will help you get a lower rate. Remember that banks and lending institutions are in business to make money. So if you don’t act in a timely manner, you may end up hurting your chances to get a lower rate.
Getting a second mortgage from your current lender may be your best bet. Find out why you have bad credit and then determine if you can refinance with a lower rate. You don’t want to ruin your chances for a lower rate when you could just not try to get one in the first place.