Get a Bad Credit Mortgage Refinance to Improve Your Credit and Consolidate Debt

Improving your credit history and consolidating your debts might seem like a pipe dream, but it is not that unusual to get a bad credit mortgage refinance to turn those two dreams into reality. Despite their poor credit, many home buyers have successfully refinanced their house loans. Most have gone on to actually improve their credit ratings as a result of the bad credit mortgage refinance. Paying off debt and using credit responsibly are the keys to this transformation.You should consider the cash-out mortgage refinanceLowering interest rates and consolidating debt are the primary reason folks see out a bad credit mortgage refinance (refi). If consolidating debt is the primary reason you would opt for such a move, the cash-out option would benefit you. The execution requires not only the refi of the mortgage but also borrowing extra money based on the equity you have built in the property. That borrowed money is bundled into the new refi amount, which of course increases the principle balance. But that lump sum of money is plowed into existing debt which solves a plethora of problems.You can solve debt problems with a bad credit mortgage refinancePaying off credit card and other outstanding debt can take several years, even if no extra debt is added. Just keeping up with interest and fees is not enough. The principle needs to be whittled away, too. In many cases, a lump sum payment is all that will really solve the debt problem. The lump sum from the cash-out mortgage can be applied to credit card balances, pay off auto notes, put a dent in student loans, and similar debts. Once those loans are reduced or paid off, the borrower will notice a significant improvement in credit scores.Benefits include more than just credit improvementHaving many creditors, each with a different payment amount, each due at a different time of the month, each to a different lender with different interest amounts, can be quite overwhelming. The situation can cause missed payments, living from paycheck to paycheck, and spreading cash too thin to actually cause any real difference in indebtedness. Having one payment to one lender due on one day of the month lessens the burden so much, is far easier to budget, and the resulting payoffs improve credit standings and make a significant move away from indebtedness.Finding a lender for a bad credit mortgage refinanceThe logical first place to start when seeking a bad credit mortgage refinance would be your initial lender, the one who now holds the mortgage. However, depending on the level of bad credit, the existing lender may not be willing to go out on the limb and further. This is often the case and sub-prime lenders have stepped in to fill the lacuna this reluctance has developed.Bad credit mortgage refinance lenders are available onlineTo find such a lender, your best bet would be to go online. Just be careful when dealing with online lenders. Make sure the sites where you supply crucial financial information are secure and you will want to check out potential lenders through the Better Business Bureau or online financial forums that exchange information among other borrowers. You will even find brokers who will take your fundamental information and supply you with a list of lenders who may be willing to execute your refi along the lines of your desired amount, your desired monthly payments, and the interest rates comfortable to your financial situation.The future can be brighterIf the borrower responsibly uses the cash-out option and refrains from overextending themselves in the future, credit scores can improve dramatically. Also, in spite of the increased principle on the new debt, interest rates and monthly payments may be reduced. Quantifying the peace of mind is impossible.