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Mortgage Refinance With Bad Credit

admin — Mon, 26 Jan 2009 16:40:00 +0000

Here are tips on a Mortgage Refinance With Bad Credit – The Pros And Cons:

To many, the term ‘bad credit’ is the end of the world when it comes to getting financing in the near future. However, it doesn’t always have to be like that, you can take the bad credit mortgage refinance option!

Mortgage refinance vs. equity finance

It is essential at the outset that you understand there is a fundamental difference between mortgage refinancing and equity financing. Basically, with equity financing you are using the surplus amount you may have stored up in your property between your outstanding mortgage amount and the appraised value of your home. However a mortgage refinance is where you find a new lender willing to lend you the whole appraised value of your property, the sum of which you then use to repay your existing mortgage lender and the remaining sum you can utilize in any manner you wish. Because of this, you are faced with a different set of problems than would be the case with an equity financing.

The pros of a bad credit mortgage refinance

Aside from any possible equity financing you can do with your property, without doubt the biggest upside to a bad credit mortgage refinance is the fact that it is a long-term and cheap form of borrowing. Interest rates are likely to be low and, possibly, can even be fixed. You could even possibly benefit from certain tax advantages from a bad credit mortgage refinance.

Because of this, bad credit mortgage finance can allow you to do things financially that may not otherwise be available to you as a person with a bad credit rating. You could use the equity you free up after you repay your original mortgage lender to invest in stocks and savings that will give you a better yield than you are currently getting on the property.

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Alternatively, you could pay off all outstanding debts you have so that you have no interest and debt payments to make each month – merely a mortgage repayment. Finally, you could even use the equity you get to invest in a long-term investment plan like your pension. In fact the options are so limitless that you should really consult with a financial expert who can best advise you on how you should put that money to the best use for you!

The cons of bad credit mortgage refinance

The number one downside to any mortgage refinancing, whether it be bad credit or otherwise, is the fact that mortgage lenders do not like to be repaid early. As such they usually incorporate some expensive penalty clauses to try and make it not worth your while repaying them early. With this in mind, you will need to read your original mortgage agreement with your original lender very carefully to make sure you won’t have any onerous default payments to make; or, you could try and arrange for the new lender to swallow these.

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That said, if you make any arrangements with the new lender that they agree to pay these fees for you, you then need to make sure they do not put any restrictive clauses in your new refinance mortgage agreement that would prohibit you from refinancing your mortgage again at some time in the future if the occasion warrants such.

Without a doubt, as a person with a bad credit history and bad credit rating, a bad credit mortgage refinance can open up avenues to you that would not otherwise be there. You do, however, need to give consideration as to whether or not you want to take this route. Not least because at the end of the day your house and family home is on the line!

Upside Down on Your House?

admin — Sat, 03 Jan 2009 23:54:56 +0000

Are you behind on your mortgage? Do you owe more than the home is worth? Payments too high and you can’t refinance?

There are no easy answers for you, but some answers are going to be easier in the long run than others. I have experienced this tragedy myself and have learned quite a bit about the options that you have. This is my report on those options.

Once you are in this situation, for whatever reason, and there are many ways you can get here,
your credit is going to be affected. The only question is how much. If you do nothing and quit paying and go into foreclosure, you will not be able to buy a house with a bank loan for at least 5 years. In addition the foreclosure will stay on your credit report for 10 years, and you will always have to explain it even if you are past the 5 year mark. If you sell it for less than is owed, the bank or banks that you owe will not let it close unless you sign a form and set up a payment plan to pay them off over time. I wish someone had told me that is an option. You can declare bankruptcy, but this will only delay the inevitable, especially if you have a lot of credit card debt. Since the bankruptcy laws changed, it is not so easy to keep your house after one. All it does is buy you time, but it costs money too, and then you are back to where you started from. The only other option is to sell the house for what you can get and work out a settlement with your bank to accept that amount as payment in full, commonly referred to as a “short sale.” This will still impact your credit and your score, but it will not be nearly as bad as a foreclosure.

Many people think you have to have someone else manage your short sale for you and that the banks will not work with the owner, but that is not true. I have done it myself 4 times.

To start with, they will not consider this unless you are behind 60 days on your payment though, so that will be the start of your credit going down hill. If you are going to do this, don’t take out any new credit cards, and if you currently have checking and savings accounts at the bank your mortgage is held by, you will need to change them to another bank. For some reason banks don’t like to help their own depositors.

Beyond these things, there is a whole step by step process to do your own short sale that I explain in a special report called “Do Your Own Short Sale.” It is not really hard, and it will save you thousands of dollars vs. having an investor take over your deed and negotiate with the bank for you. Although they are performing a valuable service, there is no reason why you cannot do it yourself and save the money.

You do need to take action NOW though, so that your credit is not irreparably harmed. Just doing nothing will end up with your credit ruined and your house gone, with nothing for you to do but rent. Don’t let it happen to you! Save your credit so you can start over in a new home of your own.

Heather Burns is an author and internet businesswoman. Go see her business site at http://www.QuickNetProfits.com which has allowed her the freedom to work at home and write about various interests. She also has a blog about one of her favorite subjects, Angels, at http://angel-post.blogspot.com Her passions include her husband, her dogs, her websites, and helping others with their credit issues. Email her at Heather426@gmail.com

Article Source: http://EzineArticles.com/?expert=Heather_Burns

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The H4H program allows homeowners to save their home.

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So feel free to be cruel. But just realize that being cruel says much more about you than it does about the people you are being cruel to!

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