If your existing second mortgage loan has a high interest rate, you may be thinking about refinancing. You are not alone. Millions of Americans have high interest second mortgage loans from purchasing their homes at 100% financing - even with bad credit.

Like most Americans, when we purchased our home, four years ago, we took out a first mortgage loan for 80% of the home value and then a second mortgage loan for 20% of the home value. The first loan was at 7%, while the second loan came with a whopping interest rate of 10%. Since we knew, we could refinance the second mortgage, we charged forward. Six months later, our home value was up 10%, giving us enough equity to refinance the second mortgage into the first mortgage. We ended up with one mortgage, at a much lower interest rate.

If you are struggling with bad credit, you can still refinance your second mortgage into your first mortgage to reduce your monthly mortgage payments. Here are some tips for a successful second mortgage refinance:

Review your second mortgage loan contract to ensure that there is no prepayment penalty associated with loan. If there is a prepayment penalty clause, contact your lender to discuss your options.

Shop around for the best loan terms. Don't rush into a loan with the first lender, who knocks on your door. Your loan is a package that comprises of interest rates, fees, points, prepayment penalty clauses, balloon payment clauses, etc. Make sure you understand your loan terms.

Know and understand your fees. Your refinance fees may include an application fee, points, appraisal fees, etc. If you are dealing with a reputable lender most of these fees will be minimal.

For more information about bad credit second mortgage refinance loans, visit http://www.kstreetloans.com

Sharon Listner writes about family and finance with a special focus on "less-than-perfect" credit financial products.

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