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Refinance Mortgage with Bad Credit

man in a suit offering a deal to refinance mortgage with bad credit

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.

 

2 Comments

  • Wade says:

    Hello, I just received a letter of demand from. Lawyer to bring mortgage up to date. Just under 12,000 dollars. I havE until March 6th to pay. I had a second mortgage loan last year. Hopefully I am able to get a loan for the amount needed to save my home! Starting work next week, was out of work which is. Why payments fell behind. I owe bank 471,000, and other loan is about 30,000. The property is worth 600,000 or bit more. I’m I. Mission bc. Hopefully there is help somewhere?

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