Bad Credit - Refinance

Bad Credit Refinance
Bad Credit Refinance Loans

Bad credit may not prevent a person from being able to refinance their home in today’s mortgage market.

Despite the well publicized collapse of the mortgage industry mortgage financing is still available. The Federal Housing Administration still makes mortgages and financing available for people with bad credit. Over $70 billion of this money has been specifically set aside to help people who are having trouble paying their mortgages stay in their homes.

The government wants people to keep their homes because foreclosure is expensive and damaging to community. To achieve this goal a number of special programs have been set up to help people avoid foreclosure. Many of these programs can help with bad credit refinance their homes and get a new mortgage with a lower interest rate.

One of the goals of these programs is to help people with sub-prime mortgages that charge high interest rates refinance to regular mortgages that charge a lower interest rate. Another goal of these programs is to help with adjusted rate mortgages or Arms switch to fixed rate mortgages.

ARM

An ARM is a mortgage with an interest rate that goes up and down with the market. This can save home owners money when interest rates are low but cost them if interest rates go up.

The interest on a fixed interest rate mortgage stays the same so a homeowner can lock in a low mortgage rate for the duration of the mortgage. Since mortgage rates are now at historic lows now is the time for those with ARMs to refinance and lock in a better interest rate.

Interest rates for bad credit refinance loans

Even a person with bad credit could get a really good interest rate. The lenders might charge a person with bad credit a few points more on interest but this could be as low as 7 or 8% interest which is still a really good mortgage interest rate.

The way to determine if you are qualified for these programs is to take your existing mortgage to a mortgage broker and let them look it over. A good mortgage broker should be able to determine if you can refinance. The mortgage broker should also be able to tell you what programs for refinancing mortgages are available in your area.

If you have bad credit the mortgage broker should be able to tell you what your options are.

Shop around on the net and in your community

Mortgage brokers are available online and in your community. Typing the words mortgage broker into a search engine should locate several of them.

If the first mortgage broker you go to doesn’t give you the deal you want go to a number of different mortgage brokers. One of them should be able to help you refinance your home and stay in it or at least save you some money.