If you are like most people you have been affected by this recession. It is amazing how things can change so drastically in such a short period of time. You may be experiencing high levels of debt at this time. You are also probably in desperate need of extra cash. The good news is that a bad credit home loan refinance can help you accomplish this goal. Below is a quiz that will test your refinancing knowledge.
What type of loan do I need?
a) 15 year fixed
b) 30 year fixed
c) Adjustable rate mortgage
The answer to this question depends on your situation. If you are planning on staying in your home a long time then going with a fixed rate loan is a good idea. However, if you are only going to be in your home for 5 years then going with an adjustable rate mortgage is a better plan because of the great interest rate.
What is a break-even calculation?
a) Something that tells you your monthly mortgage payment
b) Something that tells you the time it will take to pay off your refinancing fees
The correct answer is b. A break-even calculation will tell you how many months it will take to recover the refinancing fees. This calculation is important because it will tell you if it is worth your time and money to refinance your loan.
Are all lenders safe?
a) Yes
b) No
The correct answer is b. Not all lenders are reputable. You will need to check with the BBB before signing a contract with a lender. Since bad credit home loan refinance is such a hot market, you will see many companies try to exploit honest consumers. If you use a little bit of common sense coupled with some research skills then you should be perfectly fine.
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