Refinance Home Mortgage Loans With Poor Credit - Reduce Monthly Bills With A Refi Loan
Carrie Reeder
What Does it Mean to Refinance a Home Mortgage?
Refinancing a home loan is an everyday practice. There are several reasons to contemplate a refinancing. For starters, if you attain a cash-out refinancing, the mortgage company will hand over a lump sum of money at closing. Prior to this, homeowners apply for a new home loan, which replaces the old. In addition to creating a new mortgage, homeowners also borrow money from their home's equity. For example, refinancing an existing $125,000 mortgage, and borrowing $25,000 of the home's equity will produce a new mortgage of $150,000.
Advantages of Refinancing an Existing Mortgage
If your intent is to become debt-free in the shortest amount of time, refinancing your home is a great alternative. High interest credit cards are difficult to eliminate. Unless you are able to make large payments, it may take ten to twenty years to payoff a $2,000 credit card balance. Moreover, a new mortgage is great for acquiring funds to make home improvements, build a savings account, or plan for retirement. Homeowners with poor credit may increase their credit rating upon reducing or eliminating consumer debts.
When is the Best Time to Refinance?
For many homeowners, now is a good time to refinance their current mortgage. Individuals who obtained home mortgages before rates began to decline are likely paying two or three percentage points above the current average. Refinancing for a lower rate may decrease your mortgage payment. Moreover, refinancing may eliminate private mortgage insurance.
With low mortgage rates, refinancing for a fixed rate or interest-only option may be favorable. Before refinancing, count the costs. Remember, refinancing will entail paying closing costs. If the monthly savings are insignificant, or you plan on moving in less than five years, you will not benefit from a refi loan.
About the Author:
View our recommended Bad Credit Mortgage Refinance lenders or view all of our Recommended Refinance Lenders.
The latest information and news on Mortgages:
Mortgage rescue or rip off? (CNN Money)
If mortgage lending was the Wild West during the boom years, foreclosure-prevention counseling is the lucrative new frontier of the bust.
Mortgage application volume falls 6.2 pct (AP via Yahoo! News)
Mortgage application volume fell 6.2 percent during the week ended Nov. 14, according to the Mortgage Bankers Association's weekly application survey.
Commercial-Mortgage Bond Risk Rises After Loan Delinquencies (Bloomberg)
Nov. 19 (Bloomberg) -- The cost to protect top-rated commercial-mortgage bonds against default rose to a record, a day after two bad loans boosted concern the debt will cause losses.
U.S. tries new tack on mortgage program (CNNMoney.com via Yahoo! Finance)
The Bush administration said Wednesday that it was changing its nearly-moribund mortgage rescue plan in an effort to spark more lenders and homeowners to participate.
Commercial mortgage securities latest to show distress (Market Watch)
Risk premiums on commercial mortgage-backed securities have spiked in the past week, making this corner of the debt market the latest to show signs of mounting distress.
Yahoo! News Search Results for refinance
Brazil to Refinance 500 Million Reais in Farm Debt (Update1) (Bloomberg)
Nov. 19 (Bloomberg) -- Brazil?s national development bank plans to lend as much as 500 million reais ($212 million) to help farmers refinance debt.
RBI asks banks to seek refinance credit to fund small units (Business Standar...
The Reserve Bank of India (RBI) has asked banks to avail of refinance facility it provides to extend credit support to micro and small enterprises.
RBI asks banks to seek refinance credit to fund small units (The Economic Times)
The Reserve Bank has asked banks to avail of refinance facility it provides to extend credit support to micro and small enterprises.
BSkyB to raise $600 million in bond issue to refinance debt, make aquisitions...
LONDON - Satellite broadcaster British Sky Broadcasting Group PLC said Tuesday it plans to raise $600 million in a bond issue to refinance existing debt and acquire new businesses.
Severstal negotiating VEB loan to refinance Eurobonds (Part 2) (Interfax)
LONDON. Nov 18 (Interfax) - Severstal (RTS: CHMF) is discussing a loan with Russian Bank for Development and Foreign Economic Affairs (Vnesheconombank, VEB) to refinance $325 million in Eurobonds, Sergei Kuznetsov, the company's chief financial officer, said during a conference call.