Often people think that filing bankruptcy is their only option once they get into a financial bind, but don't count out some of the alternatives that can also save the day. For example, mortgage refinancing could be the answer. Even if you have bad credit or low credit scores there is a chance you are still eligible for a mortgage refinancing and/or a second mortgage.
To begin think about how much equity you have in your home. At lendingtree.com the idea of cash out mortgage refinancing is suggested. "Cash-out refinancing involves refinancing your mortgage for more than you currently owe and pocketing the difference." If a homeowner has been paying a mortgage for some time there is a good chance that the principal has decreased quite a bit. The good news is that the extra cash can help you do some debt consolidation to pay off your debt. Instead of bankruptcy you are able to use an asset to your advantage.
Keep in mind however, that there is a difference between cash-out refinancing and a home equity loan. When you choose the cash out option it completely replaces your first mortgage whereas a home equity loan is a second loan on top of the already existing mortgage.
PNC bank points out at their website, partners.financecenter.coim that interest rates are often the reason people choose to refinance. "When you refinance your home, you seek to replace your current mortgage loan with a new loan that has more favorable loan terms." For the most part the borrower will choose to borrow just enough money to pay off the mortgage balance that is owed. But, "If you have enough home equity built up, you may also be able to borrow an additional amount in what is called the cash-out refinancing."
While taking advantage of mortgage refinancing might not be a possibility for everyone, it is certainly worth looking into as a great alternative to jeopardizing your credit and filing bankruptcy.
|
