When a person who has poor credit is in danger of losing his home to foreclosure, what is he to do? Well, he could check into bad credit home mortgage refinance to reduce his monthly payments.
Pittsfield, MA -- (SBWIRE) -- 04/25/2013 -- Real-estate-yogi.com can help him understand what he must do to obtain such a refinance loan, including:
- Understanding Eligibility Requirements
- Traditional Banks & Credit Unions
- Sub-Prime Lenders
- Federal Assistance
Know Qualification Parameters
When searching for bad credit refinance home loans, it’s wise to know what information will be necessary to qualify. While it may vary from lender to lender, there are some things that are required across the board. Be ready to provide proof of a financial hardship, a record of one’s monthly expenditures and income, and a debt-to-income ratio of not more than 43%. Be sure to have a copy of the original mortgage and the current balance on it, also.
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Credit Unions and Banks
There are many lenders that will approve bad credit home refinancing loans; the trick is to find the ones that will work with one whose credit is damaged. Shop around a bit to learn what the best possible interest rates are for a bad credit refinance, and don’t accept the first one offered. Banks have more rigid credit requirements than credit unions do, so it may be more feasible to get approved from a credit union; this does not mean that traditional banks should be ignored.
A sub-prime lender focuses on financing borrowers who have poor credit scores. The sub-prime lending market has more tiers than a prime market, meaning that the terms and rates for lending vary only slightly. For a person who has poor credit, a sub-prime Bad Credit Mortgage Refinance Loan may be the only choice he has. These loans tend to have markedly higher interest rates than their prime counterparts. This is not meant a “punishment” for having bad credit; it simply allows for a guarantee for the lender.
The federal government has several options for bad credit home mortgage refinance. HARP is a plan that covers only those borrowers whose original mortgages are owned by Freddie Mac or Fannie Mae. Some other requirements for this assistance are that the mortgage belonged to Freddie Mac or Sallie Mae on or prior to May 31, 2009; it has never been refinanced through HARP before; and the borrower has to be current on the loan. Apply for HARP through any participating lender.
Real-estate-yogi.com located in Pittsfield, Massachusetts is here to link people who have questions about real estate to realty experts who can answer them. For a free initial consultation, dial 800-987-1397.