This article tells you about Bad Credit Mortgage Refinance Rates. Unfortunately, many believe that a few late payments here and there, a temporary financial setback, or obtaining many credit cards are just a necessary part of living, and as such can be overlooked or regarded with little seriousness.
The truth, however, is that everything impacts one’s credit score, and that sole number impacts many other things in a person’s everyday existence. Common things such as requesting telephone service, applying for an apartment, and even purchasing a home with a large down payment will be affected by your credit score.
And those are only examples of credit that has blemishes. What about those individuals who are deemed “bad credit”? They might be able to do the same things as other people, but they are going to pay for the privilege. Higher deposits on utilities, user fees for credit cards, and higher rates on mortgages. In fact, bad credit mortgage refinance rates are going to make individuals in this bracket pay hundreds of thousands of dollars more for their homes than those with good credit rates.
Even if the interest rates seem to be low in comparison, over a thirty year period, the difference is staggering. So someone who receives a four percent interest rate versus someone who receives a six percent rate is undoubtedly in an enviable position long term.
In addition, bad credit mortgage refinance rates are not just going to be the yearly interest rate that changes. Origination fees or loan processing costs will be higher, too. Often, lenders who “specialize” in refinancing mortgages for bad credit clients, will only sign a mortgage refinance on the basis of interest-only payments. They do not want to be bothered with the equity portion and monthly interest payments are much easier for bookkeeping. This makes it difficult for some to jump off the merry-go-round, as they are not improving their situation.
Sadly, many lenders and bad credit mortgage refinance brokers prey on those individuals that need their services the most. Usually people in this situation are desperate for “help” but what they receive is a contract written for the sole purpose of lining the lenders’ and brokers’ pockets. They may keep interest rates in line with other lenders, but require unsurmountable penalties in the contract.
While penalties are a legitimate form of doing business, requesting six months or a year’s worth of interest in payments upon closing the mortgage is indeed excessive and predatory. Remember also, that some people are in business to foreclose on homes and it really is a buyer beware situation.
If you must accept the fact that bad credit mortgage refinance rates are not in your favor, at least complete your due diligence and do not succumb to the hustlers.