My credit score is around 500, is there anything that can be done with this low of a credit score? Can I buy a home? Can I refinance my home with bad credit? These are some very typical questions that are asked by consumers with low credit scores or bad credit. Yes there are many options for consumers with scores in the low 500s. There are even mortgage programs for people with scores below 500 but they are harder to find and qualify for.

The best part is that the interest will all be tax deductible when you pay off your credit cards with a refinance!

When you refinance your home you are typically able to skip at least one mortgage payment, helping to free up a significant amount of money in the short term. Some programs even allow you to defer payments for up to 6 months!

There are many options for refinancing that can make your holidays better. You may want to use the equity in your home to consolidate holiday bills. Another option is to refinance to lower your monthly mortgage payments, this frees up more cash that you can use towards paying down credit cards.

With the large increase in home values in certain areas over the past few years, many people have begun to pull equity out of their home for other financial uses. Investing in other real estate is one of the most common types of uses for this type of refinance. Other options include funding retirement plans, children’s college funds and personal businesses. It is often a good idea to work with a both a mortgage professional and a financial planner to determine the best use of the equity in your home.

Due to recent increases in minimum monthly payments by most credit card companies, many people have felt overwhelmed by their monthly payments. That is why, recently, most refinances have been cash out refinances, with the borrowers using cash from the equity in their homes to pay off credit cards and other loans.

If either borrower’s credit score is below 500 on a conventional joint loan application, most lenders will not allow the income or assets of the individual whose scores are under 500 to be used for the purpose of qualifying for a mortgage, although that person’s liabilities may still be used. You may need to consider a private lender to accommodate your refinance if the primary wage earner’s credit score is under 500.

You may want to consult with a credit counselor to be sure that you have enough income for your budget. You do not want to refinance over and over until you run out of equity in your home.

When analyzing the benefits of a refinance you should look at both the short term and long term financial benefit’s. You should consider the length of time you plan on staying in your current property, how much you will save over time, and how much you will save monthly. A good way to figure how beneficial a refinance can be if you are paying off debt is to figure how long and at what cost it will take to pay off you current debts at the payment levels you are currently making.

You can lower your monthly expenses by refinancing into an interest only loan. This will help you to save a good amount of money from your monthly mortgage payment alone. If you were to consolidate debt in your refinance and switch to an interest only loan this would save you a lot of money per month and truly maximize your monthly cash flow.