August 27th, 2009 
Elisheva Wiriaatmadja
In the last few years, home owners have had to get a bad credit mortgage refinance. Lately over the past few months, the mortgage interest rate has dropped but unfortunately so has the amount of money in the bank accounts of most citizens. Ever since the housing market fell back in July 2006, Americans have seen a great decline in their credit scores. Since the beginning of 2007, the average credit score has dropped almost every month. Consequently, there are more and more bad credit borrowers in America and many of them are actually trying to find help to get a bad credit mortgage refinance.
The good news is that over the past few months, mortgage interest rates have been at historical lows and therefore it is not really as hard as it would be if interest rates were high to get a bad credit mortgage refinance. Because of your bad credit, chances are that you get a much higher interest rate than the average one. But when the average interest rate goes down, your bad credit mortgage rate will also go down. Today’s mortgage interest rate decline is a great benefit for those who are looking for bad credit mortgages.
The advantage of the global recession now is that borrowers have the bargaining power to chose whom they would want to do business with. Whereas there are many mortgage companies chasing for your business, you will have the chance to pick the one who can offer lower interest rates and lower interest fees. If you have several mortgage companies giving you offers, study and compare them carefully, and be smart to tell the one with higher fees and interest rate that you have a much better offer from another mortgage company. That way you will be pushing them to come down with a lower offer. It is very important for people to be able to walk out the door with a strong bargaining power when it comes to finances. Being able to do that you have a better chance to get a better deal in the long run.
Although you have a bad credit, it may be worth it to just try and see if you can get a bad credit mortgage lender to give you a much better offer. Try to contact several mortgage lenders and not just one, just to compare the rates and fees. You will never really know if it actually works until you give it a try.
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From what I’ve seen, even though mortgage rates are still near all time lows in recent decades, getting a mortgage refinance loan w/ bad credit is still tough unless you have a good bit of equity in your home.
I would recommend doing whatever you can to raise your credit score before applying for a mortgage refinance. The first thing is to contest EVERY bad thing on your credit report at each of the bureaus. Just doing this will often raise your score since debtors have 30 days I believe to respond to the bureaus when you contest something. If they don’t respond within that 30 day period the “bad mark” is removed from your report, raising your credit score.
If you have bad credit because of a bankruptcy years ago but have established a good credit history with your current mortgage company, refinancing with them might be easier than going to another bank to seek a mortgage refinance.
Finance companies often use mortgage lists to produce leads when seeking for homeowners who might want to refinance their mortgage loans. When they have information such as the lender’s name and interest rates on the loan, financial institutions are able to generate sales leads of borrowers who are paying high interest rates on their loans. Then these mortgage companies will offer lower interest rates to their potential customers. The customer will then often refinance their loan with that mortgage company. This is how financial businesses get such good use out of mortgage lead lists. Using these lists they are able to tap into a broad potential customer base. This would generate greater profits for these businesses because they would now have the ability to tailor their services according to consumer needs, making it possible for them to offer more attractive packages for improved sales.