BAD CREDIT HOME LOANS REFINANCE Refinancing bad credit home loans may or may not be the best choice a homeowner has. The timing, interest rates and credit scores all play a significant part.There is a cost for refinancing and if the homeowner does not occupies the property for a certain amount of time , it may never be recouped. So here are the guidelines for refinancing for bad credit loans: Refinancing costs Refinancing any loan has some cost, except when the closing costs are built into the loan and the interest rate. So to determine whether to refinance or not to refinance a homeowner has to see how long he will occupy the property to recoup all the closing costs involved in the refinance. The best way to do is use refinancing calculators which require inputs of current and existing rates and mortgage balances and new rates and mortgage amounts and gives you the amount of time needed to recover refinancing closing costs. Credit scores and Refinancing Credit scores are pivotal in terms of refinancing. Many homeowners make the mistake of refinancing when the interest rates drop in the news and in papers. That may be a good sign but taking into consideration current credit scores and the credit scores at the time of the original loan make a big difference. If the credit scores are low compared to last time, refinancing may be more expensive and there will be points and higher interest rates charged. A loan officer with an expertise in bad credit mortgage refinancing can greatly help in sorting out this kind of scenario. Refinancing and Interest rate Whenever there is drop in interest rates they should be evaluated carefully. Whenever the rates drop one has to evaluate if they have dropped far enough to offset the costs of refinancing. The closing costs are appraisal, points, lender fees, title and escrow fees. The amount that is refinanced determines most of these fees. If the mortgage is less than 80,000 these fees may or may not be easily recoverable because the drop in rates and lower payments may not be enough. Refinancing and debt consolidation When a home owner is consolidating his debts to lower his monthly cash flow it usually is the opportune time to refinance. By paying off short term debt and high interest rates like credit cards and personal loans its advantageous to refinance and lower your payments. Mortgage rates are amortized over a longer period of time and hence it lowers your monthly cash flow. To recap, refinancing a bad credit home loan or any loan is a complex situation. You have seen some of the variables that go in a refinancing equation, namely refinancing costs, current interest rates, credit scores and above all the duration property will be held. The complex equation is not as easy it may sound and with the help of a bad credit refinancing company and a loan officer this can be done effectively. Tempting to refinance at the drop of rates is only good for people who have higher rates and plan to stay in the property next 5-10 years. Debt consolidation is always a hands down win win when executed properly, lowering your monthly cash flow. Start out with debt consolidation if possible- and always look for the time period you will occupy the property and it will start making sense.