Your Debt Repayment Plan - How to Retire Your Debt the Fastest
Remember, you can become debt free, no matter your level of debt, you just need a plan
to get you there. A great way to start is to make a chart listing all your debts. Prioritize
them, listing them from the highest interest rate to the lowest. Pay the minimum payment
on all but the debt with the highest interest rate. On your debt with the highest interest
rate, pay the minimum payment plus the maximum your budget will allow. As soon as that
debt is retired, switch those resources toward the next debt on your list, using the money
you were paying on the now-retired debt in addition to the minimum payment you've
already been paying on the debt that was formerly #2. Keep progressing in this manner
until all your debts have been retired. It could be sooner than you think.
Refinance, Even With Bad Credit & Get Out of Debt Faster!
What You Should Know
Mortgage Refinance -
Bad Credit or Good
There are many bad credit mortgage refinance options for borrowers. The refinancing
option that you'll be looking for if you want to eliminate some of your high interest credit
card debt is the cash out refinance. Similar to a debt consolidation loan, a cash out
refinance will allow you to pull cash out from the equity you have in your home and use it
for anything. You may want to use the cash for a new boat or a great vacation. We all
probably would. That, however is how many borrowers got into trouble in recent years.
A more effective use of your cash from a mortgage refinance would be to pay off all
outstanding high interest debts, such as credit cards, car loans, and store charge cards.
You'll be able to get all the advantages of a debt consolidation loan, such as having one
convenient monthly payment that is much lower than the total of your current credit card
and loan payments. The difference is that a cash out refinance will offer you greater
flexibility. The money is yours to do with as you need to. If you just want to refinance to
get out of a bad ARM before it resets, you can just refinance the ARM into a fixed rate
mortgage product at a lower interest rate. This is important and could save you from
foreclosure, a tragic credit mistake.
What if, like so many people, you've already gotten yourself into a situation where your
credit is poor? Maybe you even have pretty bad credit. If your FICO credit score is less
than 680, you now fall into the subprime borrower category. If you've got just a bit less
than a 700 FICO score, you're in kind of a grey area. In the past, many mortgage
companies would treat you as if you had good credit in order to get your business, but other
lenders would treat you as a subprime borrower. Now there are far fewer that will accept
sub-prime business, but you can still get a refinance at a lower, fixed interest rate, in most
cases. To find out, fill out this quick and easy form from LowerMyBills.com They are the
pioneers of having multiple lenders bid on your business to drive down your costs and get
you the best interest rate on your refinance, even if your credit is bad.
What You Need to Know Before You Refinance Your Mortgage - What Score is Bad?
Sometimes a refinance to consolidate your debt is not the best thing to do. It depends on
your situation. If you're below about 680 or so on the FICO scale, you'll probably have to
contend with higher interest rates on your refinance than if you're credit score is in the
700+ range. Since 2006, you can also get the new Vantage credit score. In that system,
scores range from 501 to 990. The lowest range is 501 - 600, which will get you a Vantage
rating of 'F'.
Because of the problems in the sub-prime mortgage market, the market has tightened up
substantially since 2006. Interest rates have gone down substantially due to governmental
action. If you are in the process of refinancing, some lenders will still allow you to refinance
even if your credit is bad, but be prepared to pay more for your loan. In some cases you
may have to look at several different lenders. According to Fair Isacc, the folks that brought
you the FICO credit scoring system, you will pay about 4-1/4 percentage points more if you
are refinancing your mortgage with a credit score of 520 than a borrower with a credit
score of 720. That may still be a substantial savings over your existing mortgage, however,
especially if you have an ARM that's about to adjust. In addition, if your credit score has
improved since you got your existing mortgage, refinancing stands an even better chance of
providing you with a lower interest rate.
Can you still take advantage of a refinance with really bad credit? Of course you can. You'll
just have to do a little more searching to find a lender that can accommodate your needs.
Also, be prepared to pay a higher interest rate if you've got bad credit than a borrower with
perfect credit. The beauty is that the equity in your home allows you to have substantial
collateral for your loan so you can still get a favorable interest rate, it just won't be quite as
good as a borrower with perfect credit.
In addition to your credit score, there are two terms you'll want to be familiar when trying
to get any mortgage, but they will really affect your rate if you are trying to refinance with
bad credit. Both are actually ratios. These are Loan To Value (LTV) and Debt to Income
ratios. Loan to value is the amount of the loan you're trying to get as a percentage of the
value of your home. Naturally, the less you are trying to borrow, and the more equity you
have in your home, the lower the risk for the lender. Debt to income is exactly what it
sounds like. That is your debt load as a percentage of your verifiable income. Once again, a
more favorable ratio from the lender's perspective is more income and less outstanding debt.
You are of lower risk to default on your refinance if you have more free cash every month.
Interest Only Mortgage Refinance
If you're sure your financial situation is going to improve in the short term, you can get one
of several interest only options. It is extremely important, however, that you realize that
interest only refinance plans can be dangerous because you are not paying down the
principal. When you refinance this way your first year or two will have substantially lower
payments. This is advantageous if you to get back on your feet. After the initial time period,
usually between 5 and 15 years, the payments will rise as you begin to pay on both the
principal and interest. It is important to note that, as the name implies, these loans pay only
the interest on your mortgage, the principal amount is not reduced. So if your mortgage is
$300,000, after you pay on the interest only refinance for whatever the initial term is, say 10
years, the principal owed will still be $300,000. Hopefully your home has appreciated to the
point where you once again have substantial equity.
Cash Out Mortgage Refinance for Borrowers With Bad Credit
You can also get a traditional cash out refinance, where you refinance your home based
upon the home's market value. You'll be able to pull out some, or all of your equity. Your
home's equity is the difference between the home's market value and what you currently
owe. In most areas, especially over the last few years, real estate appreciation has been
substantial, so many people have quite a bit of home equity. This is true even in light of the
real estate market's collapse in some areas such as south Florida, Michigan, and Las Vegas.
If you are paying high interest debts, you can make this home equity work for you by
paying off those high interest debts using the cash from a refinance. The refinance will have
a substantially lower interest rate than your other debts, allowing you to save a tremendous
amount of money every month. If you have bad credit, you will, in most cases still be able
to refinance, you'll just pay a slightly higher interest rate. There are many lenders that
specialize in these types of refinances, just do your research before choosing a lender.
Bad Credit Refinance Resources
Need to Refinance, Even With Bad, or Less than Stellar Credit?
They say (who the heck are they, anyway??) competition ensures consumers get the best
deal. That sure seems to have happened in the ultra competitive mortgage and refinancing
industry. In the last few years several firms have come on the scene that have multiple
lenders compete for your business. Obviously the lenders know they are in a competitive
bidding situation, so they strive to give the consumer their best possible product, rate and
fee structure in order to land their business. In addition, they are well aware that by treating
you well, they stand a great chance of getting your mortgage business in the future.
Businesses know it's much more cost effective to keep a customer, rather than spending
valuable resources finding new ones. These days the credit markets are more difficult than
those of a few years ago, so you need lenders who are willing to work with you.
One of the true pioneers in this area is LowerMyBills.com. They are able to connect you
with a huge pool of potential lenders, securing you the best possible rate, and saving you
time. Their established relationships with the leading lenders assures that you'll get great
rates, no matter how good or bad your credit score. Click to go to LowerMyBills.com now
to discover how low of an interest rate competition can give you. As the pool of lenders that
are willing to work with homeowners for a refinance dwindles, it's good to have a business
that knows the remaining lenders. Once again, that helps you get the best mortgage
refinance, even with poor credit.
Many of the mortgage services online are actually lead generation services. Lenders will
compete for your mortgage or refinance business, but you may get bombarded with phone
calls during the process because the services sell your leads to multiple lenders. Recently,
there have been some changes afoot, as competition in the mortgage industry tightens up
because of the sub prime mortgage problems. Now, consumers are looking for competitive
mortgage rates, but they don't want to deal with the hassle of fielding dozens of phone calls
interrupting their valuable time.
Again, one of the original companies to seize the opportunity to serve consumers who feel
this way is LowerMyBills.com. They let you take advantage of the competition in the credit
industry to secure the best possible rates on your refinance, no matter your credit score.
They may even be able to help you even if you have pretty bad credit, and they're owned by
Experian, so you know you can trust them to get you a great mortgage or cash out
Their form is very easy and fast. Just fill it out. It will only take you about 2 or 3 minutes.
That's all it takes to find out if you will be saving hundreds of dollars each month, especially
at today's low interest rates. In this competitive marketplace, they are driven to offer you
the lowest interest rate and fee structure.
They do all the work to sort through the offers. That means you only have to deal with
them, not reps from many different lenders pestering you throughout your busy day. Now,
however there are several firms using this business model. They don't all use the same
lender pool, so by trying different services, you're exposed to the widest number of lenders
competing for your loan. Therefore, it's best to submit a form to multiple services. It costs
nothing, yet the potential for substantial savings is large.
If, while you're refinancing, you do want to consolidate your debt to eliminate the higher
interest rates you're most likely paying on unsecured debt such as credit cards, it could
make the process faster and easier for you. Just be careful, you may be putting your home
on the line. Even if you don't own a home, you may still be able to consolidate your debt. If
you do own one, try ING Direct . They'll secure a very competitive mortgage refinance
quote, assuring you get the best interest rate and something many people forget, a favorable
fee structure. Remember, ING Direct is a primary mortgage lender. They actually supply
the money, not get it from someone else, as many companies do. That allows them to have
low interest rates and fees. In addition, they know they're competing for your business, so
they'll bend over backwards to get it. Unlike many other lenders right now, they're in a
position to do exactly that.
Just fill out the form, it'll only take you a minute, and you could save hundreds of dollars
every month for years. You just don't know how much money you'll save until you submit
the form. It's so simple. You've got nothing to lose, but plenty to gain. You don't have to
refinance, but you should at least see if it can save you money. That few hundred dollars
every month could be the difference between sinking deeper into debt and becoming debt
free. In addition to mortgages and refinancing, they have programs for debt consolidation,
even for those who are not homeowners.
Here are some key things to look for when choosing a lender for a bad credit
* The low refinance rates you want - Remember, the mortgage rates you pay will go a
long way toward determining your monthly payment.
* No hidden loan costs - This is another area in which to be very careful. Go over the
mortgage contract and all addendums with a fine toothed comb. It is common practice in
the industry to slip in extra fees and charges that can add up to thousands of dollars. Some
mortgage firms feel they have you with your back to the wall and you either won't notice
these additional fees, or will just go ahead and pay them. It is a good practice to hire an
experienced real estate attorney to examine the contract. The few hundred dollars it may
cost is a pittance compared to the money you'll pay because of a one sided refinance
* Excellent service - You need to someone who is responsive to answer any questions you
may have during the refinance process.
to marketing or research companies. This can compromise your security. This is extremely
valuable, and some businesses make a substantial profit from it. Make sure that the lender
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