Tips on Refinancing Homes or Cars with Bad Credit Rating

When you refinance it simply means taking out a new loan in order to cover the cost of a previous loan. Hopefully you walk out with some cash as well! Ideally, the refinanced loan should have a lower interest rate and a lower monthly payment.
If you have bad credit, refinancing at times is helpful. Refinancing makes perfect sense when the first loan taken during a period of high interest rates can be paid off and a new loan with lower interest can reduce your monthly payout. Be aware though, if the difference in interest rates isn't significant, you should avoid refinancing as some lenders require additional charges up front.
Since a period of time has passed since you took out your first loan it does impact the new loan. You'll need to compare different lender's offers before refinancing your home or car with or without bad credit.

A big advantage to refinancing your home or car is the money you can save from the first loan payment schedule. It's also possible to change the amount of your monthly payments or even change banks so that you can get a loan on more favorable terms.
It's vital you pay attention and refinance at the right time. Be patient and do your homework. Take the time to research the market thoroughly to find the best interest rate and terms on the loans available for your credit rating. Your credit history will play a key role in being able to refinance. You might want to beef up your score before you go into a lender to make a deal.
Obtaining a Bad Credit Home Loan
It's a common misconception that those carrying a bad credit rating can't get a home loan. This isn't true since getting a loan for homes and many other needs are now more than ever possible even for those with less than glowing credit scores.
Having bad credit means usually means you’ll be required to put down more at closing in the form of a larger down payment and you'll likely end up paying a higher interest rate as well.
A typical down payment on a bad credit home mortgage ranges from 3% to 5%. If you find yourself unable to come up with the down payment you might need to find other avenues for the money as at short stop gap measure such as a short term personal loan. Then once you’ve refinanced you can access your financial position. Another alternative is to look for a down payment assistance program.
Improving your credit rating will give lenders more confidence in giving you a home loan. Actively working on consolidating debt to improve your credit score consolidating debt to improve your credit score, paying all your bills on time and getting a major credit card with all payments current will help tremendously. Also, keep a close eye on your credit report for inaccuracies and incorrect information.
Lending companies look at several factors when deciding whether or not to grant home loans to bad credit individuals.
Typically the loan to value ratio, monthly income and debt to income ratio are considered. However, keep in mind that you're free to negotiate with your lender. Oftentimes it's possible to get better terms for your bad credit loans simply by doing a little "haggling" with your lender.

by Michael Benifez