One of the most vital factors in how long will it take to take back the costs of the refinance is the total cost of the new loan. Key calculations like the application fee, attorney fees, title search, local fees, credit check, inspection, document preparation and title insurance will also be included.

Fifthly, a lender can charge a certain amount towards closing costs, but only up to 3% of the principal amount. If the borrower feels that the lender is asking for too much, he can tell the lender and wait for the latter to correct the amount.

Since the loan has the government's backing, banks don't require PMI (private mortgage insurance), an additional monthly expense for conventional loans, where borrowers finance over 80% of the home's value. A VA borrower also enjoys competitive interest rates because the bank's risk is offset by the government backing. Favorable rates, combined with no PMI, can significantly lower your monthly payment.

Once you select the lenders, you need to fill up an online application form and provide your contact details so the lenders can call you. It is important that the quote you get from the lender is non-binding i.e. you are not forced to go ahead with the lender once you fill up the form. Generally the marketing executives call up within 24 hours, so be prepared to receive a call from the loan provider. It is recommended you negotiate with the lender and further reduce the interest rates and avail affordable terms and conditions. It is not that difficult to refinance home with bad credit if you are organized in your approach.

There are some important factors that must be seriously considered before making applications to mortgage broker companies as well. Gone are the days when someone could just walk into a bank or mortgage broker and secure a loan with a 650 credit rating with hardly any background check done on them.

Mortgage Associates of Texas services almost all of Greater Houston: Houston, Katy, Richmond, Rosenberg, Jersey Village, Sugarland, Missouri City, Friendswood, Clearlake, League City, Galveston, Seabrook, Pasadena, Deer Park, Channelview, Baytown, La Porte, Spring, Humble, Kingwood, The Woodlands, Conroe, and Tomball.

A bad credit mortgage refinancing such as this can have several advantages. The term of the loan will be longer. Since even a high interest subprime loan carries a lower interest rate than do high interest credit cards the new house payment will be smaller than the total of the old house payment and the consumer debt payments. However, choosing to refinance in this manner carries risks. If the homeowner does not change the behavior that led to the high debt, even more high interest credit card bills may be accumulated. Since the homeowner's equity has already been “cashed out” of his/her house the only alternative in a money crunch may be bankruptcy or foreclosure.