Bad Debt Remortgage
Categorized: Debt Consolidation Loans | No comments
When is it a good idea to do a bad debt remortgage?
- If your other credit is good and this is your only bad debt.
- The creditor is willing to give you a big discount to settle the debt.
- If you need to borrow money and the debt is a lien on the property it must be paid off.
Generally it is not a good idea to payoff defaulted debts unless they are recent and your other credit is good. You can to pay them off to improve your credit report and credit score. Settling bad debts older than a year or two is usually not a good idea since this will not improve your credit score, if fact paying off old accounts may lower your score.
There are times when you may need a home loan and the debt is a lien or judgement on your home or investment property. In order to do a bad debt remortgage and get the cash out home loan you must payoff all liens affecting title. Usually a bank will not do this type of refinance and you’ll need to find a private hard money-lender or mortgage broker.
If all of your credit is bad you can settle and payoff all of your bad debt (debt settlement) for about 50% of what you owe, then get a fresh start.
Questions to ask yourself or a professional when considering a bad debt remortgage:
Can I a afford the payments?
Will it cost more than debt settlement or consolidation monthly payment plans?
Do I really need the cash out?
Can I lose my property if I don’t payoff the liens?
There a lot of things to consider when looking at getting a home loan, closing costs, repayment terms, balloon payments and mostly if a new mortgage will really benefit your debt or credit situation.
This post was tagged with: bad debt remortgage, credit card debt consolidation, debt consloidation
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