If you are among them, perhaps you can get back on the right track financially by refinancing your existing mortgage to a new lower rate.
Thousands are doing so everyday for a myriad of reasons, regardless of their bad credit ratings or derogatory credit files.
There are many lenders who are willing to take a risk on bad credit borrowers to refinance their current mortgages.
These lenders are usually refinance specialists and as such they have much expertise in the area of bad credit refinancing for mortgages.
They are willing to give you a second chance to rewrite your credit history while affording you the opportunity to refinance your mortgage to more favorable terms that are easier to manage with any current budgetary constraints you may have.
Losing Your ARM (Mortgage) If your adjustable rate (ARM) mortgage is costing you an arm and a leg, its time to get rid of it.
Adjustable rate mortgages are the most popular to refinance.
An adjustable rate mortgage can balloon out of control, although when a borrower first takes out an ARM, they believe they are getting a mortgage that they can afford, especially if they do not completely understand the mechanics of the ARM.
An adjustable rate mortgage is a mortgage that adjusts its interest rates after 3, 5, or 7 years, and then annually to reflect market conditions.
If you are stuck in an ARM, chances are your payment may have ballooned out of control.
Many borrowers with ARMS are forced into bankruptcy or foreclosure, so you should consider refinancing from an ARM to a fixed rate mortgage that has a predictable monthly payment plan for the life of the mortgage.
By obtaining a fixed rate, you can pocket the extra money that you would have been paying out each month to use for other bills or needs.
Great New Terms For Your Mortgage Even those borrowers who have a fixed rate mortgage in place can benefit from refinancing because they can obtain better terms, for added periods of time, and possible reduced monthly payments.
You might also wish to tap into the equity that you have built up in your home during the refinance, as many do.
Borrowers who choose to cash out some equity typically use it for home improvement or paying down other debt.
Remember that every dollar invested into your home by way of home improvements and additions will yield a two dollar return when you go to sell your home in the future.
How Online Lenders Can Benefit Your Even More Many borrowers with bad credit are finding that they have a greater chance of being approved for their mortgage refinance when they choose a reputable online lender.
Online lenders have more money to lend and are more willing to take a risk on you when refinancing your mortgage.
Additionally, online lenders allow you to fill out all paperwork regarding your refinance online, which makes the process streamlined and efficient.
You can be approved in much less time with online lenders than by utilizing a local bank.