Bad Credit Mortgage Refinancing – Refinance High Interest Mortgage With Poor Credit

With bad credit, you can't afford not to refinance a high

interest mortgage. Working with the right lender, you can trim

your loan costs and help your monthly budget. You even have the

option to cash out part or all of your equity to pay off high

interest credit card debt. Subprime lenders can help you secure

financing and reestablish your credit.

Ways To Reduce Your Rates

Even with poor credit, you can lower rates on a future refi

loan. Adjustable rate mortgages offer lower initial rates than

fixed rate mortgages. Often for two to seven years, rates can be

guaranteed. After that, rates are based on an index fund, so

they may increase. But with most lenders you can either lock in

rates earlier or refinance.

Some lenders will also further reduce your rates if you opt for

automatic payment. Your monthly mortgage payment is deducted

from your checking account, so you don't worry about getting a

payment in the mail.

The surest way to find low rates is to compare loan quotes. Each

lender will offer you a different loan package with varying

rates and fees. Base your loan decision on who can offer you the

best overall financing. If you plan to keep your loan for seven

years or more, consider paying a point or more to reduce your

rate even more.

Kinds Of Rates To Expect

The best credit scores, 650 or higher, are eligible for market

loan rates. Every 50 point drop, on average, adds a point or two

to that loan rate. Closing fees are comparable to a conventional

rate mortgage. A bonus with subprime lending is that you don't

have to pay for private mortgage insurance.

Where To Find Subprime Lenders

Most financing companies now offer subprime financing to those

with adverse credit. You can start your loan search with a

mortgage broker. Simply mark that you have poor credit on your

loan estimate form, and they will connect you to several

competitive lenders.

Another option is to go directly to the lender sites. Either

check their market rates on the homepage or request a quote.

Make sure that you also note closing costs and fees. You don't

want to get caught on early payment fees either.

About the author:

View our recommended Bad Credit Mortgage Refinance lenders or view all of our

Recommended

Refinance Lenders.

Written by: Carrie Reeder