Refinancing With Bad Credit Mortgages
Bad credit mortgages can be used to refinance your existing debt, but potentially at a higher price that what you’re paying on your mortgage today.
Many times an individuals credit will fall off based on a certain events such as job loss and sickness which can result in the accumulation of debt and negative impacts to credit profiles.
The individual may have been able to secure their existing mortgage at excellent rates, but are now facing higher rate refinancing options due to the fall off in credit rating and perhaps reductions in cash flow.
If you situation is similar to the above, then bad credit mortgage refinancing may be the most likely option for getting your cash flow under control and saving a further slide against your credit.
While a new first mortgage will likely be at a higher rate of interest, it is still likely to be substantially lower than credit card interest rates if that is the type of debt you’re trying to consolidate.
Even a private mortgage with interest rates in the 9% to 14% range can still provide for beneficial refinancing, provided that you have an exit plan for the refinanced debt at the end of the private mortgage interest term which is typically one year in length.
At the very least, bad credit mortgage refinancing is going to buy you time to figure out how you plan to deal with your debt load in the longer term. Not only can this stop collection actions from taking place, but it also can reduce the level of stress that is associated with a high debt load and money strapped cash flow.
And once the credit cards get paid down or off, your credit score can start to improve, increasing the chances of getting better financing options in the near future and avoiding complete credit destruction brought on by a lengthy period of loan arrears and potentially personal bankruptcy.
Also keep in mind that bad credit financing options should never be considered as long term solutions due to the higher cost of financing your going to pay. But for relatively short periods of time, they can be the best solution available to you.
If you have bad credit and would like to discuss refinancing options through a bad credit mortgage product, please give me a call so we can go through your situation together.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel