Bad Credit Mortgage Refinancing Loan: Eligibility Criteria

Oh, this Bad credit Rating! Even if, once for any reason you default on the payment the credit rating goes negative. There are various disadvantages of Bad Credit rating such as no financing, no mortgages, and no other financial security. To eliminate all these credit related problems, the financial institutions are working very hard joining hands with the Federal administration. However, the recent economic crash made the financial situation poor for all the Americans, the condition was worse than the worst for the mortgage payers.

There were millions of people who have been declared as Bankrupt and other many were going to file their Bankruptcy. The original prices of home went down again the mortgages, and there was nothing left to give as collateral. In such a situation the Government introduced FHA Home Refinance. With the help of the Mortgage refinancing, the borrowers can be granted to lower the monthly installments either by making the down payments or extending the term of the mortgage loan.

The homeowners with bad credit must be thinking that there is even though no solution to their financial and mortgage payment related problems. Actually, there is an advantageous solution for them. There are many refinancing companies offering bad credit mortgage refinancing loan, these loans are specially designed for the home owners who have either filed the bankruptcy in the recent past or having the bad credit history.

Before applying for the home refinance with bad credit, there are certain eligibility criteria that an individual must match:

• You must have a hardship letter to show the lender that you are unable to repay the home mortgage and running with the shortage of finance.
• You have to commit that in spite of the past bad credit history, you will be able to repay the new refinanced mortgage loan amount at the scheduled time.
• All the information and financial details that are mentioned in the application form must be right and valid.

If, you are having bad credit history but qualify the above conditions, then there is nothing to stop you applying for the Bad Credit Mortgage Refinancing Loan. By doing so, you can prevent the foreclosures and improve your financial situation and credit rating as well. There is another option for the homeowners with bad credit rating, which is known as the Second Mortgage.

The Second Mortgage for bad credit homeowners is a loan that is granted against the home equity. Now, because, this loan is a second mortgage after the primary mortgage on the same home it is known as Second Mortgage. The home equity is kept as a security pledge to approve the Second Mortgage. Even if you have the bad credit rating but your home equity is higher than you can qualify for the Second Mortgage for bad credit.

The bottom line is that, the financial crisis is equally painful for the people with bad credit as with the good credit rating.

Source : www.articlesupport.com/2011/02/25/bad-credit-mortgage-refinancing-loan-eligibility-criteria/