Refinance with Poor Credit
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If you are like every other home owner or general consumer out there, you need to pay for your expenses somehow. If you have poor credit, you might be limited in your options as to what you can do (or so you think…keep reading!). This can be especially annoying to homeowners who want to refinance their mortgages to take advantage of low interest rates but have had a few debt defaults in recent years. The story is always the same: you see these low 5% interest rates advertised on TV and you know that you deserve to refinance your home loan with this low interest rate. However, once you call, you find out that in fact you can refinance your mortgage, but it will cost you a lot more than you think. "What?" you think to yourself… "Why does it cost more for me to refinance my mortgage than I thought it would?" The reason is simple: poor credit. Refinancing with poor credit can be difficult. You might have filed for bankruptcy or racked up a whole bunch of debt which you just couldn't pay off. Debt defaults take a long time to get off your credit report (if they ever come off!) and they can affect every lender to whom you owe money.

This is because these days, lenders are very clued in to borrowers credit scores and credit history. All your credit information is stored in a giant database somewhere and if your credit is poor for some reason, it's going to show up on a mortgage refinancing report. And banks probably don't mind seeing a few defaults and poor credit accounts here and there. More fees for them! Your bank might like to see one of their client's earmarked as 'poor credit'…they can raise your interest rate and you can't do anything about it.

These days, having poor credit isn't necessarily as poor as it should be. This is because banks are business entities too. Banks borrow money just like people do. In times of relatively low interest rates, banks need to make money by originating loans. And, a lot of new 'subprime' lenders have opened up shop in recent years and are specifically in the business of lending to people with poor credit. They are looking to refinance poor credit accounts like yours and collect massive fees on the backend.