Refinance your mortgage with bad credit
Refinancing your mortgage with bad credit can help you consolidate debt and lower your current monthly payments on all debts. As well by consolidating debts this can help you improve your credit score.
When looking to refinance your mortgage with bad credit you have a few options available to you. Weighing out these options can help you best determine your maximum savings on refinancing your mortgage & loans.
Refinancing with your bank
The first stop on your way to refinancing is generally the current bank you are with. This may become difficult depending on what institution you use in Canada. Banks are required to underwrite mortgages on B20 risk guidelines. These guidelines require credit & debt servicing ratios along with a qualifying rate which can disqualify borrowers that may have qualified a year ago.
Refinancing with a B-Mortgage Lender
If you are close to renewal of your 1st mortgage and have bad credit a B-Lender has products enabling home owners to consolidate debts with lower credit scores and income types. Rates are higher than conventional mortgage lenders like banks but where banks fall short B-Lenders fill a gap. Generally, B-Lenders are used for shorter terms like 2 or 3 years.
Refinancing with a Home Equity Lender or Private Lender
Home equity lenders allow home owners with enough home equity to refinance their mortgage with bad credit. Equity lenders provide 1st, 2nd & 3rd mortgages to home owners in BC regardless of their credit rating.
Home equity loans in some cases can be a cheaper alternative than refinancing your entire mortgage. Home equity lenders offer Second Mortgages, and, in most circumstances, this is a far cheaper alternative than refinancing a bad credit mortgage as a 1st Mortgage.
When holding a 1st mortgage you have qualified for this mortgage at a great rate. In a market where rates are going up it is usually better to hold most of the mortgage at the best rate possible and obtain a 2nd mortgage to consolidate all the bad credit & other debts.
The uses of a blended rate calculator can help you determine savings.