When financial troubles strike, many of us turn to our most valuable asset, our houses, to bail us out. This is where refinancing comes in; refinancing is nothing but taking a mortgage on your home so that you can pay off a previously taken mortgage, or even multiple mortgages. Besides this, it also comes in handy in many other ways like changing the duration of your loan repayment period (either by shortening or by lengthening it), giving you a fixed mortgage rate, placing some much needed cash at your disposal, etc. Another huge advantage of refinancing is that you can correct a decision that you had taken previously, where you had taken a mortgage at a high interest rate or for durations that have now proven unsuitable to your needs.
A question often asked is whether persons
with bad credit can avail refinancing mortgages. The answer to that is yes, refinancing
mortgages are given out by lenders to persons with bad credit as well, and are
known as bad credit mortgages refinances.
A poor credit rating is a bane in more
than one way, as anyone with bad credit is well aware; the doors of many banks
end up shut for us and those that aren’t end up charging a higher than normal
rate of interest combined with an endless stream of paperwork and legalities. In
fact, seldom do banks agree to refinance clients, an exception to this (often)
unwritten rule being if the bank has funded the first mortgage on your home;
even in this case, do not expect any benefits or a lowering of interest rate.
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