Saturday, June 13, 2009

Refinance A Mortgage Even With Bad Credit by Jack Tyrrell

Mortgage problems are very common in today's economy. With constant layoffs, declining wages, inflation, and many other problems, it is becoming more and more difficult to make a loan payment. As such, this has led to very high default rates among home owners, and the market is flooded with bad loans and worthless houses. This is especially common with houses which have suddenly lost a lot of value in the housing market, since the cost of the loan may now exceed the value of the house, resulting in the house being "under water" (i.e. more is owed on it than it is worth).

Homeowners who find themselves crushed under a bad loan have dreadfully few options, especially if they have bad credit. Luckily, the federal government and many other organizations are trying to step in to help home owners with large loans. The end goal of all this assistance is to help to repair the damaged economy, but it means that many persons may refinance or renegotiate their loans in order to stay in their house.

Persons who need to refinance their loan should first talk to the bank which owns their loan. This may not be entirely straightforward. The loans that were made were packaged and sold to other banks, and so it may take some time to find out who owns the loan. On the upside, those who purchased the loans are generally interested in refinancing or otherwise adjusting the loan in order to allow them to continue to collect on it. Legal advice and assistance will likely be needed, and it is necessary to cut through a lot of red tape. This means that any borrower looking to refinance through this way should be prepared for a fight, and that they should do their research.

It may also be possible to refinance through the assistance of a charity or a state or federal program. There are a number of associations these days which will help a borrower, regardless of credit rating, find the programs they need to refinance their loan to a much more affordable rate. As such, researching the local laws and charities may enable a borrower with bad credit to refinance.