A lot of homeowners feel a need to refinance their mortgage, even though they have bad credit. Most of the reasons to refinance a home mortgage are financial. Here are 5 reasons that people with bad credit should refinance their home mortgage.

Low Mortgage Rates:
Refinancing a home mortgage will give you the chance to take advantage of all time mortgage rates. By refinancing in to a mortgage with lower rates, even by just 1% can save you hundreds of dollars. Or you could choose to shorten the length of your mortgage, and still have the same payments, due to the savings on the mortgage rate. Refinancing with bad credit can mean extra steps, including getting a mortgage broker, but is still beneficial to many homeowners out there with mortgage rates at record lows.

Quicker Ownership of Home:
If you recently got an extra sum of cash and are looking to spend it wisely, refinancing to pay off your home is a great option. This way, you can pay off a large portion of interest and principal right away reducing your future mortgage payments every month and help get out of debt quicker.

Improving Credit Rating:
Refinancing into a lower rate can save you money every month and with that you can pay off other high interest debts. Paying off a credit card, or car loan, or other debts will free up extra money for you and improve your credit score. With the money you save you can pay extra on your mortgage and save even more on the principal and long term interest payments.

Refinance out of an ARM loan:
ARM (Adjustable rate mortgage) loans are popular right now. Many homeowners got into them when the economy was kicking butt and rates seemed like they were set in concrete. Not so anymore. Refinancing out of an ARM loan and into a stable fixed rate mortgage is a financially decision to make. This will give you constant mortgage payments, at lower rates. Peace of mind and saving money.

Cash out refinance:
If you are in a financial emergency you may want to choose a cash out refinance. You can refinance for more than you owe on your current mortgage, if you home has equity in it, and pocket the difference. This money can be used for anything but is generally used only for an emergency situation.


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