Six Reasons to Refinance and Save Money on Your Mortgage

Borrowers with plenty of equity in their homes but a low credit score may be able to take advantage of low mortgage refinance rates in spite of their credit challenges. While they will not likely qualify for the lowest rates, they may still benefit from a mortgage refinance. The best way to find out if you qualify for low mortgage rates is to complete the form on this page.

Low mortgage rates are not the only reason to consider a bad credit mortgage refinance.

Top six reasons for a home refinance

1. Lowering your interest rate. Today's mortgage rates for those with the best qualifications are often under five percent. While a bad credit mortgage loan will likely be financed at a higher interest rate, the rate may still be lower than your current mortgage rate.

2. Reducing your monthly payments. Bad credit mortgage refinancing can reduce your monthly payments in two ways: first, if you lower your mortgage rate you will pay less in interest. Second, you may be able to extend the length of your loan. For example, if you have owned your home for ten years, a new loan will extend your payments for another 30 or perhaps even 40 years instead of the 20 years of payments left on your current mortgage.

3. Recalculate your budget. If you can qualify for bad credit mortgage refinancing and lower your payments, you may be able to pay off other debts more quickly with the extra money you will have each month.

4. Shorten your loan term. Some borrowers may want to pay off their home loan more quickly by switching to a 15-year loan. The monthly payments are usually higher on a shorter loan but the interest rates are a little lower.

5. Converting to a fixed-rate loan. Borrowers with an adjustable rate mortgage may want to consider bad credit refinancing into a fixed-rate mortgage so they won't have to worry about future mortgage interest rate increases.

6. Consolidating debt. Homeowners with credit card or other expensive debt may want to use their equity and try bad credit refinancing to consolidate their debt and reduce their overall monthly payments.

Homeowners interested in exploring the possibility of bad credit mortgage refinancing should enter their information on this page to see if a refinancing can improve their finances.