|Bad Credit Mortgage Refinancing|
SMO can help you find some of the few lending companies offering bad credit mortgage refinancing. Our FHA mortgage lenders provide sub-prime and FHA mortgage refinancing for people with bad credit scores. We believe that all borrowers deserve affordable loans and that is why we created the bad credit mortgage refinance program. Refinance your home with debt consolidation options for borrowers with late mortgage payments, and past bankruptcies. We suggest that you look at all your mortgage refinance loan options before refinancing that commits to use your home as collateral for another 30 years. If you qualify for a refinance loan from FHA or VA, chances are you could save thousands of dollars a year. Take advantage of government refinancing and discuss a mortgage refinance with your trusted FHA lender, SMO. Mortgage Programs for People with Bad Credit are now available with FHA and VA loan products.
Refinance Your Mortgage with Low Fixed Rates!
Shopping for a refinance loan can be nerve-wrecking enough with good credit, so if you have less than perfect credit you have likely had some challenges getting approved. Out team assists thousands of homeowners with refinancing their bad credit every month.
Non-Prime Loan Tips: Understanding Bad Credit Mortgage Refinance Options by Jennifer F.
Many consumers think having bad credit scores equates to no opportunity for purchasing a new home. However, there are home mortgage loans available for borrowers with less than perfect credit. Read on for a basic lesson in sub-prime lending and bad credit home refinancing.
The credit score consumers see on their credit report can range from approximately 300 to approximately 900. (Credit scores are also referred to as a FICO scores). Most borrowers find themselves somewhere in the range between 600 and 700. According to online media giant, Bank Rate, those with a 620 credit score or lower typically have a history of late or missed payments on their existing credit card accounts and most likely will not qualify for a conventional mortgage. Most mortgage lenders consider these types of consumers to be sub-prime and the mortgage loans that are approved for are called non-prime mortgages and "FHA home loans" which are government insured mortgages.
The mortgage rates for sub-prime mortgages are higher than for traditional, or prime, mortgages, but government lenders are able to offer better terms and rates with the FHA home mortgages. The rate quoted to a consumer also depends on factors such as credit score and down payment size. Non-prime loans may also carry a significant prepayment penalties and/or balloon payments. A prepayment penalty is charged to the borrower if they decide to sell the home or refinance before the term of the loan is complete. A balloon payment means that the borrower has to pay off the loan in full after a certain period of time. If they are unable to do so, they must refinance the loan or sell the home.
What if a borrower already owns a home, but is faced with bad credit? In order to help clean up their FICO score, some homeowners may want to cash out on their home equity. Sometimes called bad credit mortgages, these loans are designed to take the equity in one’s home and use it to consolidate credit cards and other types of debt. These loans typically have relatively low mortgage interest rates and the interest is usually tax deductible.
There are definitely options for those with less than stellar credit that are considering a new home mortgage loan or use existing equity to get out of financial trouble. However, because of the variables that exist within the structure of sub-prime mortgages, borrowers should always compare FHA mortgage refinancing with loans offered from sub-prime lenders. Another good tip is to know their credit score before shopping for a mortgage.
Jennifer is an author who has delivered many helpful home loan related articles: Bad Credit Home Loans to 100%.