When times are tough, like now, there is typically a surge of homeowners who look to refinance their home mortgage. Everyones financial situation is different, but money is tighter all around and a refinancing your home loan, even with the credit squeeze that is going on, can be a great way to save hundreds every month.

This credit crunch has limited a lot of homeowners options for refinancing plans, however, there are still programs available to help a homeowner refinance their loan. Their are even Government plans available for homeowners with the worst of credit. Home sales are dramatically falling, along with home prices, and the banks and mortgage lenders want to work with people to allow them to stay in their home rather tan have it foreclosed on.

If you happen to have a good credit rating then the options you have for refinancing your home loan are pretty much the same as before the credit squeeze. However, there are usually now more steps and improved verifications, leaving only the truly qualified, with equity, good credit, verified income and investments, and other stringent verifications to attempt to avoid further financial problems for the homeowner, or the mortgage lender, in the future. Mortgage lenders and banks will keep a close eye on any borrowers during these tough economic times, but if you are qualified you will have no problems, just be prepared to have to go through more steps for your approval.

When a mortgage lender, broker, or bank is looking at your credit rating and history, the amount of your credit used to credit available, or debt to income ratios, know that these factors weigh heavily on your interest rate, terms and conditions of the refinancing deal. Simply put, if you have a large amount of debts, and have run up nearly all your available credit, with little income to support all of this, you may not be able to get the best deal available on a home loan refinance. Even more simply put, you debts can not exceed 40% of your monthly income, mortgage payments included, for the best deals.

Homeowners who have a bad or less than average credit rating should not give up. The unstable housing and credit markets fluctuate greatly every day, even hourly sometimes, and this could mean the chance for you to refinance, even with the bad credit, can be had. Their also may be Government backed home refinancing plans, courtesy of President Obama, that can help you.

Homeowners who need to refinance and want to use the Government plans, can do so even with little to no equity in their homes and with credit scores below 700. This helps millions of homeowners who have seen their property values dramatically decrease and now are left with a mortgage that is worth more than their home, even though they have been paying on their home for years. Now, a homeowner can refinance up to 105% of their homes value, which opens the door for a lot more approvals for refinancing applications.

The tough economy has proven difficult for everyone, especially homeowners. Be sure though to not let this lead you to believe you are helpless and have no options when refinancing your home mortgage. Remember there are a lot of lenders and banks who want to work with you, even if you have been rejected by a few keep trying. Use the internet to find potential lenders and do not give up. Honestly explain your situation be vigilant for the right mortgage lender at the right time to refinance your home.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner