How Refinancing Home Mortgages With Bad Credit Can Save Thousands

When financial pressures mount, a proactive move is to refinance the debts that are causing the most problems. Inevitably that means refinancing a mortgage, but there are specific is issues that affect those of us who have bad credit ratings. But there are options that make refinancing home mortgages with bad credit a very feasible move.

In fact, for the most part, mortgage providers are happy to agree a refinancing deal that will ensure the continued repayment of their loans - the last thing that they want is to have to take possession of a home and try to sell it. So, a constructive solution to managing mortgage debt is always welcome.

However, there are terms and conditions to every financial agreement, and there is no difference when it comes to home mortgages. It is important know the ins and outs of any refinancing program so as to avoid any costly choices.

Refinancing and Bad Credit

The purpose of refinancing your mortgage is, firstly, to make the repayment scheme more manageable, and secondly, to free up extra funds to help cover other debts and expenses. The problem with refinancing home mortgages with bad credit it is that the element of bad debt can sometimes affect the terms of the refinancing agreement.

For one thing, the interest that is charged on any new agreement will be higher than it would be with good credit, while the amount of funds that some lenders are willing to approve might be smaller than is hoped. But, there are clear advantages to managing mortgage debt in this way anyway.

What should be remembered is that the constructive nature of the move makes it attractive to all parties. So, when home mortgages need to be refinanced, the benefits still vastly outweigh the negative effects of bad credit.

Benefits for Everyone

The benefits are impossible to ignore, with mortgage providers getting their money back and borrowers reducing their monthly repayment obligations. When refinancing home mortgages with bad credit, this is the number one concern, of course. But with the right terms and lenders, the savings can mean thousands over the course of the year.

For example, a mortgage of $200,000 may require monthly payments of $900. After 10 years, as much as $75,000 of the mortgage principal will have been paid off, reducing the sum owed to $125,000. But managing mortgage debt means buying out the balance, and repaying the $125,000 over 25 or 30 years, with the repayments falling to perhaps $450 per month.

So, the borrower sees their outgoings fall, while the lender sees their home mortgage loan repaid in full. And if the refinancing loan is taken out from the same mortgage provider, they benefit further by securing more business.

Finding a Lender

Part of getting the best possible terms is finding the right lender. When refinancing home mortgages with bad credit, this inevitably means searching the Internet, where a variety of lending firms offer a range of deals. Comparing these offers is essential.

Amongst the leading options are subprime lenders, who tend of provide better overall packages and are more likely to approve the refinancing loan. However, their interest rates tend to be high, so managing mortgage debt through them is assured but more expensive.

Another option is to go to your existing mortgage provider and negotiate the best terms possible. Familiarity on both sides makes this very possible. But whatever lender is considered, always make a point of checking their reputations with the Better Business Bureau before agreeing to any home mortgage refinancing agreement.

Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loan and Student Loans with Bad Credit. For more information about his services please visit him at


  1. That is a clever approach to save money but chances of a little risk can be in it, but as there is no transaction fruitful if risk is not involved within. So a careful monitoring at each move can help a lot with saving money.

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  2. In today’s real estate market, refinancing a mortgage is the best way to reduce interest rates and save thousands. The mortgage interest rates are at an all time low which has proved a boon for a lot of borrowers. If you have the required scores and income and meet all the required criteria of the lender, you will be able to qualify for a home loan refinance easily. However, with a bad credit, it will be difficult for you to get qualified for a mortgage refinance. After the real estate crisis that hit the market in the last 2-3 years, most lenders are checking the credit situation thoroughly in order to qualify them for a loan.

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