Refinance Subprime Mortgage

Large numbers of Americans face the burden of having a subprime mortgage on their home.

A subprime mortgage is a mortgage designed for persons with lower incomes or bad credit ratings.

Many subprime ratings have higher interest rates than standard mortgages. Some subprime mortgages also come with adjustable rates and flexible. These adjustable rate mortgages have terms that enable the lender to increase the interest rate during the life of the mortgage.

Fortunately it is very easy for persons to refinance subprime mortgages to standard mortgages. This can reduce a person’s interest rate and mortgage payments. It can also reduce the risk of foreclosure and help families reduce their debt.

Sources of Subprime Mortgage Refinance

The best source of subprime mortgage refinance for average people is the federal mortgage lenders Freddie Mac and Fannie Mae. These are chartered banks funded by Congress and both of them have programs for subprime mortgage refinance.

A person with a mortgage issued by either of these lenders can easily get it converted into a standard mortgage through a federal program called Making Home Affordable. This program is also available to homeowners with mortgages from other lenders.

The Federal Housing Administration and state housing agencies can help homeowners learn about this program. These agencies can also connect homeowners to lenders that specialize in subprime mortgage refinance.

There are also private lenders who will be willing to refinance subprime mortgages for persons with good credit ratings. These lenders may also be willing to work with those who have bad credit and enough income to pay off a mortgage

Qualification for Subprime Mortgage Refinance

If your credit rating has improved since you got your subprime mortgage it should be fairly easy to get subprime mortgage refinancing. To qualify for this refinancing you’ll need a credit rating of at least 600 or higher. The higher your credit rate the better terms you’ll get on a subprime mortgage refinance.

Running a credit report can show you what your credit rate is. You should read your credit report and check for false and inaccurate information. Credit bureaus have to remove false and inaccurate information from your credit report. Removing false information from your credit report can improve your credit score.

If your income has increased but your credit report is still bad you might still be able to refinance your subprime mortgage. Paying off a large percentage of your mortgage can increase the equity on your home and increase your likelihood of getting your mortgage improved.

Subprime Mortgage Lending

Always make sure that the subprime mortgage refinancing that you get is a fixed rate mortgage. In a fixed rate mortgage you pay the same interest on your mortgage for the life your mortgage. This means that your mortgage payments will be the same.

Never get an adjustable rate mortgage because with that kind of mortgage your lender will be able to raise your interest and your payments.