Chances are very good, if you're reading this, that you've already determined you'll need to use your residence as security in obtaining a bad credit mortgage or refinancing package to alleviate debt or stave off foreclosure. Its' not a comfortable position to be in, but it's certainly not a dire one. Securing a poor credit loan is not necessarily something to fear.
Obviously, having security to back up a loan or mortgage refinancing package almost always allows you to borrow more, and often to obtain more favorable interest rates. Plus, secured loans enable lenders and borrowers to negotiate for longer repayment schedules. Bad credit debt consolidation loans can definitely help you repair your credit score over time.
Why Not Take Unsecured Poor Credit Home Loans?
The stigma associated with securing a loan with an existing property has practically disappeared these days. Truthfully, it's going to be difficult to obtain an unsecured loan if you have bad credit. If anything, you may have to obtain costly Private Mortgage Insurance (PMI).
It may be scary to think that bad credit loan institutions might seize your home if you can't repay. But if you're truly going to get out of your bind, you'll hopefully commit to:
Borrowing only the amount you can reasonably repay given your economic capabilities
Repaying on time to restore your credit and, hopefully, renegotiate for a lower interest rate after paying down a significant amount on the principle
Accepting a realistic bad credit mortgage repayment schedule that affords you long-term peace of mind without gobbling up monthly income.
Finally, realize that even with an unsecured loan there's no guarantee that your lender won’t look toward your wages or property if you fail to make your payments. Your first good step should be in contacting a range of lenders and finding out what can work for you in a secured bad credit loan.
Mortgage Credit Problems Columnist
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