Getting a mortgage with bad credit can be a stressful situation. If you have bad credit in the first place it could be because of late mortgage payments or credit card debt you just cannot afford to pay. Many have been laid off while rates on loans jumped with little warning. Whatever the reason, make sure you try to negotiate with your lenders to get and keep the best rate. The bank doesn’t want your house and may be willing to make arraignments. They may offer to extend your payment term or they may just lower your rates so it never hurts to ask. The bank would much rather you owe them the same amount they lent you, than to have you ‘Short Sale’ your home or simply walk away.
Negotiation with your lender is a must, specifically if you have a second mortgage. Subordinate lenders have more to lose. If your home goes into foreclosure, the second lender risks not seeing a dime. They’ll be more desperate to negotiate and may even settle the loan for pennies on the dollar and not risk being left out if your home goes to the auction block.
Bad credit mortgage refinance loans are also an option for some people. If you just can’t handle seeing your credit slide even further, then applying for bad credit mortgage refinancing might work for you. In this situation, a new lender will pay off your old loan and make arraignments with you for a new loan with different terms. Some of these lenders are backed by different sources and have different requirements. They my put more emphasis on your employment record than your credit score. No matter whom your lender is or going to be, you can bet that they will want to make sure you can make the payments. So make sure you’re secure in your job and let your debt restructuring begin.