Bad Credit Refinance FAQs
There seems to be a lot of confusion when it comes to bad credit refinance. There is simply so much information out there and it is often times hard to distinguish between the legitimate and illegitimate information. In order to dispel some of the myths associated with this type of refinance, I have taken the liberty to organize the most frequently asked questions regarding bad credit refinance.
Q1: Do I really need a bad credit refinance?
A: It depends. You will have to compute a break even analysis. You must determine if the length of time that you will be staying in your home is longer than it will take to recover the cost of the refinance. For example, if you are only going to be in your home for 3 years and it will take 5 years for you to recover the cost of the refinance, then it obviously does not make sense to proceed.
Q2: Should I just stay with my current lender?
A: You need to explore your options. I would not recommend staying with your current lender. Taking the time to shop around and look for better interest rates will pay off in the long-run. Cutting corners in this area will hurt you more than anything else.
Q: What do I do with the savings each month?
A: You should definitely not look at your newfound savings as “free money”. You need to use this money each month to pay down your credit card debt. The whole reason you decided to refinance in the first place was to save money. If you do not take full advantage of this extra money by paying down debt, then the whole process has been wasted.
Getting a bad credit refinance is not always an easy task. However, you can now use this information to your advantage when trying to get a bad credit refinance.
