Even with bad credit you can consolidate your debts with a mortgage loan. Refinancing your mortgage to cash out your equity will help you get out of debt quicker. By paying less on interest charges, you can focus on paying off your principal.
Shopping Smart With Bad Credit
Bad credit doesn’t mean you have to pay extremely high rates or fees. By shopping smart, you can save thousands on your refinanced loan. Money better spent on paying off your debts.
The best way to find low rates is to ask for quotes first – lots of quotes. Fortunately, the internet makes research a snap. Most lenders and brokers post rates on their homepage. While these rates are easy to compare, it is better to ask for specific quotes for those with poor credit.
You can also choose from a variety of mortgage loans. Refinancing your mortgage can lower your overall rates and cash out your equity. A home equity loan or second mortgage just borrows part or all of your equity. A line of credit allows you to draw out your equity at any time.
Look at both subprime and traditional lenders. Both offer financing to those with adverse credit. However, you most often will find better deals with smaller companies. They offer low rates to compete with the national companies.
Working With Legitimate Lenders
When you work with a legitimate lender, you will find good deals and full disclosure. All of your questions will be answered in a timely fashion. You will also know actually how much your loan will cost.
You can also find companies that will work with you to improve your rates in the future. Some lenders will automatically refinance your mortgage in two years, after you have improved your credit score.
Avoid any company that requests your personal information without first giving you a quote. Don’t sign any forms that you don’t understand. And never sign over the deed to your home.
Planning For The Future
Start planning for the future once you have consolidated your bills. Work toward paying down the principal and making regular payments. Once you have improved your credit to good standing, you can refinance for even lower rates.
To view our list of recommended debt consolidation companies online, visit this
page: Recommended
Debt Consolidation Companies Online.
Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.
