Interest rates were just reduced to almost zero. If you have a higher interest mortgage on your home or property, it's a great time to look into refinancing. Some mortgages don't even have to be refinanced, they can be adjusted downward with just a small fee.
Credit card debt can also be rolled up or tranferred to another card to save even more. A lot of creditors are waiving any balance transfer fees or providing no interest for many months. However, be sure to make your regular payments as many will void the special promotion if a payment is missed.
This page contains the following solutions.
When refinancing a home mortgage you will get a lower interest rate if you agree to pay 1 or 2 "points". The loan manager may offer you "6.75% with no points" or "6.25% with 2 points".
Here are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community.
How do I refinance a mortgage with a 549 credit score?
There are so many variables to situations like this that it would be impossible to really answer your question. A score of at 640 is what lenders usually require along with good answers to a lot of questions.
Is your current mortgage paid up to date and paid on time for many months/years?
Why is your score at 549?
Did something major happen to cause this?
How long has your credit score been in the 500s?
Are you currently paying your bills/obligations on time?
Do you have steady job that should last a long time?
How long have you had a steady job?
Is your salary sufficient to cover your present obligations or is this the sole reason for the wish to refinance?
As you can see all of this type of question would have to be answered before a financial officer would even discuss a loan with you.
If you have a bank account (most banks will not open an account with this low a credit score - unless you have a large sum to deposit) as banks have people who can advise you on how to raise your credit score.
here are some links that may help you understand what you are facing but some have very good advice on how to improve your credit score. This may not be what you are wanting to hear but your score is very low.
If you are a veteran then the VA is the first pace to visit for help and advice.
smartasset.com/
www.rocketmortgage.com/
I have a pretty substantial credit card debt with high interest rates. I have some equity in my house but not a lot of income. Does anyone have an advice for getting a better rate on my credit card debt? I have thought about rolling my debt into my house payment but it is a little scary. I have heard horror stories about last minute charges, hidden costs, etc with refinancing. At any rate, this seemed like a good place to post this request.
I don't know much about house refinancing but here are some good tips on debt reduction from About.com
"- Quit charging anything. Now. - Make a list of what you owe and concentrate on paying off the smallest bills first. Forget the interest rate; forget the number of payments left. It's easier to pay off a $150 bill than a $1500 bill... so do it. - Every time you pay off one bill, take what you would have paid on it and put it toward the next one. - Work toward saving money in other areas and put that money toward paying down a bill. - If you can make extra cash, earmark it for a certain bill, until that bill is paid off. - Even if it's only pocket change, hold on to what you can until you get enough together to add an extra few dollars on the payment. Even five or ten dollars will make a difference, so don't think they aren't enough to bother with. - Don't ever miss a payment. But when you do, make it up as fast as you can. - Promise yourself a small treat when you pay off the next debt."
frugalliving.about.com/
The Dollar Stretcher has some great tips in their archive.
www.stretcher.com/
Here's an article I found here at ThriftyFun
www.thriftyfun.com/
Hope that helps :-)
Cindy
I agree with the above advice. The better your credit rating, the better your interest rate will be. I don't know where you live, but you state you have equity in your home. You don't need to refinance, you can get a home equity line of credit. Check with your local credit union. I just got a HELOC with NO closing cost (as long as I keep the line of credit open for two years .
When faced with a similar issue I called all my creditors and explained the situation and stated to them that if we could not get a lower interest rate that I may be forced to transfer my balances to a lower rate company most of them offered to match the rate and those with high balances I applied for their hardship program and got six months interest free as long as my payments were on time. so for those six months any extra from our low income went to those cards first. Good luck and it doesn't hurt to ask.
i would not refinance and roll debt into your house. chances are that when you are feeling that you have freed up more money, you will spend more and not apply extra to your house. you still have the debt-just in a different form.
First, call all of your credit card companies and ask for a lower interest rate. You just might get it. You mentioned being afraid of hidden fees in the refinancing process. Don't be. Choose reputable banks, mortgage companies and credit unions with local offices and go in and sit down and talk with them. They will help you understand everything. Get copies of all three credit reports first and make sure there are no errors. Find out if you qualify for a lower interest rate on your home than you currently pay. If so, refinancing can save you cash each month or you may be able to shorten the life of your loan without making larger payments. Or you may decide to roll some of your debt into your mortgage. Just remember never to mortgage the full amount of your home. What if you have to sell? There will be realtors fees and you never know exactly what the real estate market will do. Also, be sure to see what you qualify for as far as a home equity line. We're in a similar situation and we kept the credit cards with good rates, refinanced to a lower rate and added a small amount of credit card debt into our mortgage so that our monthly payment didn't change, and took out an equity line. This way we're paying less interest and writing fewer checks.
Refinancing in general is a bad idea. Your playing roulette with your house. Mortgage companies make it sound appealing of course. If you don't borrow money they don't make any money. Your best bet is to call your current credit card companies and tell them that you have been offered a lower interest rate by a different credit card company. Its ok to fib about this. Tell them you are thinking of switching to this other credit card, and ask if they can offer you a competitive rate. They will most likely do so rather than lose your business.
Hello, I have to refinance but I don't want to. Has anybody ever faced this situation? I have credit card debt for the first time in my life and most of the time I can't sleep at night. Thank you.
Hi Eugenia,
We posted this as a new request:
www.thriftyfun.com/
Susan from ThriftyFun
I am a loan officer out of Texas and my niche is helping people get out of debt. Credit Cards, Car Payments, Personal and Bank Loans can have very high payments sometimes. There are many advantages to refinancing.
Consolidate all your payments to one.
Lower your monthly bills.
Tax Write Offs.
Whenever you make a monthly house payment you pay interest and principal. All that interest that you pay adds up and you can right it off at the end of the tax year. Now if you are paying interest on credit cards, cars and other loans chances are they are higher and not tax deductible.
As far as hidden fees, any loan officer you deal with should be upfront and honest with you. Be sure to ask for a Good Faith Estimate and compare it to the HUD-1 you get when you are closing at Title. A good loan officer should not be off by more than a couple hundred dollars. I always over estimate.
If anyone of you need to talk or need help please email me at
arthur@preferredmortgageplus.com
Hello, I have to refinance but I don't want to. Has anybody ever faced this situation? I have credit card debt for the first time in my life and most of the time I can't sleep at night. Thank you.
yes, we have refinanced three times, and each time it gets worse. it feels good to have all the bills paid off at first, but then you find yourself buying things again and before you know it you are right back where you started. if you do refinance be careful of what you get locked into. we had housefhold finance refinance us then when we refinanced again we ended paying them an extra 5,000 so make sure you fully understand, go with an institution that you can trust, like a regular bank. and do THROW AWAY ALL CREDIT CARD AND DO NOT LET YOURSELF
REAPPLY FOR THEM. it is so easy to just go ahead and get them, but then when you are in a pince you use them and then you are in a hole again.
you may qualify for an unsecured line of credit or consolidation loan at lower interest than what the credit cards are charging. Talk to your bank or credit counsellor to discuss your options. Once you have arranged this, cut up your credit cards and don't apply for any new ones.
First pray and ask God to help you. Then ask your bank or credit counsellor for that good advice given by "beanygurl" before. I know what it is like to not be able to sleep because of debt. God can help with both. I wish you the very best!
lesson be learned!!!!
my grandmother bought her home like 40 years ago for $20,000.00, i have no idea what its worth today but over the years she refinanced upon refinanced her house she is now indebt for $100,000.00. the man that was living with her left and she is now on her own and she is 80 yrs old working at a car wash. watch where you put your dollars!!!!!
Have you tried credit counseling? Consolidated Credit Counselors are very good. That way you would not have to refinance your home, and whatever you do if you decide that you do want to refinance, do not let the bank or what ever place you go through talk you into an open line of credit on your equity, its very easy to pay off your credit cards but its also a good way to dig yourself into an even deeper hole than your already in, and whatever you do, cut up your credit card and tear up any credit card offers you get in the mail. Take a hard look at your finances and see where you can cut back, put every cent you can toward your credit card debt. Make a budget and stick to it as much as you can. There are lots of sites that you can download budget sheets. "The Budget Stretcher" (http://homemoneyhelp.com) is one. I'm not sure I spelled that right. Keep coming here and look for tips for saving money. I've been where you are and did what I have advised you not to do and ended up having to declare bankruptcy, I don't want that for you if it can be helped, that will stay on my credit for 10yrs. I'm starting over, and now I'm doing all those good things, budgeting, looking for tips, and doing a lot of making my own mixes, etc... Good Luck.
If at all possible, please do not consolidate your credit card debt with your mortgage. The last thing you need is to be paying your credit card debt for the 30 years of a typical mortgage!!!! In that time you may have amassed even more credit card debt. There has been some great advice posted for you. I wish you all the best. Credit debt is scary. I've been there too. I am now debt free and it took 12 years but it sure feels great.
Re-financing gets you a rate a lot lower than the credit card companies are charging. But make sure you maintain the equity in your home though. If your home would sell on the market now for much more than you owe then you're in good shape. Watch out for credit counselors. The so called "non-profit" are frequently not & can get away with large "hidden" fees. So investigate. But if you can re-fi without selling out the profit for your house, do. It will bring peace of mind.
I live in Philadelphia, PA and own a home. Now a days everyone is talking about re-financing their home loan. Someone told me that even the President has urged people to.
Should I get my home loan re-financed? If yes, why and how? Can someone please guide me? Are there any organizations or individuals who can help? It will be appreciated.
By M.S.Chaudhry from PA
Hi,
I am a realtor in your area. The first question is what is your current interest rate on your present mortgage and how many years do you have left. The reason people refinance is to reduce their mortgage payment by obtaining a lower interest rate. Unfortunately there are charges involved in refinancing which can be rolled into your new mortgage. It makes sense to refinance if there is at least a 1/2% to 1% between your old rate and your new rate. Any reliable mortgage company can help you with the refinance. Even your bank can handle it. Also, if you refinance your home, the application process will be the same as when you purchased. In other words, you need to qualify to carry your new mortgage (have sufficient income and good credit). Let me know if you have other questions.
Rose
The new federal program to help homeowners refinance or modify their loans is called Making Home Affordable. There is a tool that quickly tells you if your current mortgage is backed by Fannie Mae or Freddie Mac and if it is you may be able to benefit from the program.
As the realtor said the answer is maybe. Depending on the difference in the finance rates. Remember there are always closing costs with refinancing. These costs can be up to $3,000.00 or mre depending on which state you live in. The closing costs is basically money thrown away. Would you save more money by simply paying that $3,000.00 onto the principal of your present loan?? In my case the answer was Yes.so I didn't refinance. It always makes sense to pay a little extra on your principal every month even if it's only $10.00 it saves you huge amounts of money in the future in interest costs. However make sure you tell your mortgage company that that extra money is for the principal only...otherwise they will apply it to some other costs and your effeorts are lost.
I have never had to remortgage my house before so I am unsure what steps I must take. Do I hire a remortgaging solicitor first before sorting out a new home loan?
Or do I just deal with the lender directly without the need for a conveyancing lawyer?
Are you behind in your mortgage payments? Are you still working or retired? Would you consider a mortgage modification? All of these questions are needed in order to answer your question. To get more answers I suggest calling your current lender to see if you can modify your loan to a lower interest rate. You also might want to talk to friends to see what lenders they are using. The Loan Officer is paid only if they get an approval for a new loan or modification program. Don't go to your local bank that has your checking & savings account I don't know too many of them that will do a mortgage for their clients Good Luck.
