Home refinancing through traditional lenders is becoming harder these days. These lenders have strict qualifying criteria that look at your income, job stability, and credit history. And even if you qualify for a mortgage refinance, you can be limited to lending more than 65% of the equity. Thankfully, alternate lenders allow you to refinance your mortgage without such restrictions. In fact, North East bad credit mortgage refinancing lets you leverage your property’s value.
What Exactly is Mortgage Refinancing?
A mortgage refinances lets you pay off an old mortgage with a new loan. It utilizes your home’s value against the amount you have paid off your current mortgage to release equity. By refinancing your mortgage, you enjoy better terms and may get cash. To determine the value of your property, determine the current worth of your house. Get an approximate market value by looking at similar homes in your area. Then, calculate 80 percent of such value. The result is the largest amount you can expect to refinance for.
Then, subtract the outstanding mortgage balance from 80% of your home’s value. The remaining sum is the potential equity in your house you can refinance for.
Benefits of Refinancing Your Home
Paying off your mortgage involves paying a prepayment penalty. Because a refinance is a new mortgage, you cannot avoid this fee. But you can save money in the long run by getting a lower interest rate. Moreover, refinancing your mortgage can get you up to 80 percent of your home’s value. The release of the equity gives you access to the cash you can use for any project you have or investments you have in mind. And once you get access to your equity, you can consolidate your debt. You can use the money you get to pay off your high-interest debts such as personal loans and credit cards.
Can Your Finance Your House with Bad Credit?
Even if you have bad credit, you can still qualify for a mortgage refinance. First, you have to do something to improve your credit by paying off debts on time and decreasing your debt-to-income ratio. Also, you can increase your chances of getting accepted for a mortgage refinance when you have more equity in your home. So, try to pay off your mortgage until you have built more equity. Lastly, you can find alternative refinance lenders that offer services such as refinance, mortgages, and home equity loans.