Many homeowners have had their credit score plummet in the past year (due to job loss and the rise in their credit card debts) found that they were faced with mortgage loan dilemmas: to refinance their mortgage or not, and if it was even possible to refinance despite the job lost. If this is familiar to you or someone you know, you should be aware that there are ways to refinance your mortgage even if you have bad credit; but there are significant risks and possible dangers associated with bad credit refinance loans from lenders.
If you’re wondering what the dangers are of bad credit refinance loans, you would think it make sense that if you have bad credit and sky high debt, refinancing a home is a reasonable choice to lower monthly mortgage payments. However, the bad news is that bad credit refinance loans are pretty problematic. The reason is obvious, lenders prefer good credit consumers as they have less risk. So for bad credit consumers, lenders are wary to lend. Even so, some lenders still give people with bad credit the opportunity to refinance their home mortgages – just with lots of strings attached, including high interest rates and stipulations.
Be aware that bad credit refinance loans could turn out to be more trouble than they’re worth. Before you take out a bad credit loan, be sure to consult with a housing counselor affiliated with a government housing support program. You may find that you don’t even need a bad credit refinance loan. Look into MakingHomeAffordable.gov, you may be eligible for home assistance and be able to refinance your home mortgage loan through a government program.
Many Americans would say that home ownership is one of the biggest part of the American Dream. Buying your first home is a true milestone, proof that you’ve accomplished something big and are moving up in the world. Most people would like to own their own home, unfortunately the cost is huge and out of reach for many people. So if you have a home, protect it. Seek as much information as you can before making any financial decisions.
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