| A subprime mortgage seemed like a good idea for | | | | - You can close revolving credit accounts that only put |
| many aspiring homeowners just a few short years | | | | you in more debt. |
| ago. It was the most touted real estate loan by most | | | | - Paying all your bills on time can also help. |
| lenders. Unfortunately, after taking out the loans, many | | | | Be Advised: By taking this step lightly, you might not be |
| borrowers realized just a bit too late, that they were | | | | eligible for the best mortgage refinance rates. If you |
| not able to meet their loan's requirements. Thankfully, | | | | think it would be impossible to repair your credit, think |
| there are ways to get out of the predicament now. | | | | again. |
| Subprime Mortgages - What Are They? | | | | You are entitled to one free annual credit report from |
| To give you a brief background, subprime mortgages | | | | each of the three major credit bureaus, Equifax, |
| are usually offered to people with a poor or bad credit | | | | Experian, and TransUnion, so take advantage of that |
| history. Since low credit scores did not prevent folks | | | | opportunity. |
| from getting approved, these mortgages were often | | | | Step 3: Have a steady source of income. |
| the last resort. Of course, the terms often included high | | | | Creditors always want to be reassured that their |
| interest rate, loan application fees as well as balloon | | | | borrowers have a steady sources of income. That |
| payments and prepayment penalties. | | | | steady job ensures that you will always have enough |
| Refinancing A Mortgage | | | | money to at least cover the interest payments of the |
| Here are five quick steps to help you refinance your | | | | loan. |
| subprime mortgage. | | | | To qualify for a second mortgage or eliminate your |
| Step 1: Timing is important when refinancing a | | | | existing loan, you must prove that you have a stable |
| mortgage. | | | | job and steady paycheck. If your income is strictly |
| It is vital that you take action when the timing is just | | | | cash, provide documentation certifying that your cash |
| right, especially if your existing mortgage comes with | | | | income is constant and steady. |
| an adjustable interest rate. The right time to refinance | | | | Step 4: Evaluate the equity in your home. |
| a mortgage would be: | | | | How much home equity do you have left? If the equity |
| - Just before the interest rate adjusts to a higher rate, | | | | is 10% or less of the value of the property, chances |
| - Before your pre-payment penalty is activated and | | | | are you might not be eligible for the best refinancing |
| - Before the required balloon payment is called. If you | | | | rates at the moment. Start reducing the size of your |
| don't have those key pieces of information about your | | | | existing mortgage before applying for a second |
| mortgage, you can always contact your lender and | | | | mortgage. |
| ask for it. | | | | Step 5: Shop, Compare, and Apply |
| Step 2: Re-evaluate and assess your credit rating. | | | | Once you have lined up all the details and are ready, |
| Have you made any improvements to your credit | | | | the only thing left to do is shop for best mortgage |
| score since it was last reviewed? There are several | | | | rates, make comparisons, and submit your application. |
| things you can work on right now, to repair your credit. | | | | |