Bad Credit 2nd Mortgage Refinance Options - 3 Options

Usually, a homeowner will choose to take out a second mortgage in one of two situations:

a. at the same time that their first mortgage is taken out, with the money being used as a way to pay for some of down payment associated with the first mortgage

b. some months or years after the first mortgage is taken out, as a way to come up with cash that is (relatively) low interest in order to pay off high-interest debt such as credit card debt

It is quite common for homeowners to want to refinance their 2nd mortgage loan, especially if the interest rate they are currently paying is particularly high. It is possible that they can often qualify for a lower interest rate, either due to:

* having a better credit score than before, or
* the fact that average interest rates have gone down

For somebody with a poor credit score (say, one under 600 or so), it can be difficult to find a lender who is willing to refinance their second mortgage. It helps if you know where to look.

If you are looking for bad credit 2nd mortgage refinance options, here are 3 options to consider:

1. Refinance just your second mortgage with a bad credit mortgage lender:

One viable option to consider is that of finding a bad credit mortgage lender who will help you refinance your second mortgage (even with a bad credit score), while leaving the first mortgage intact the way it is now.

2. Refinance both your first and second mortgages together:

Another common option is to refinance both your first and second mortgages under a single umbrella loan. The total loan amount will be roughly the same as the combined loan principals you carry now, but the weighted average of the interest rate you pay will be lower than what you are paying now (in most cases).

3. Work to improve your credit score for a few months before refinancing:

A third option is to simply hold off for a while. For some people, it can make good financial sense to wait a while in order to improve their credit score a bit before trying to refinance their second mortgage loans. This strategy can pay off, provided that you are able to continue to afford your payments in the meantime.

Consider these 3 options as you look to refinance your 2nd mortgage, even with a bad credit score.

Posted in: Credit,Mortgage,Options,Refinance