You can refinance your mortgage as often as you want. Financing companies are more than willing to process your loan application, reaping the benefits of closing costs. You, however, only want to refinance when you can get a real benefit from the deal. Most often that means a lower rate, but there other instances as well.

Benefits To Refinancing With Bad Credit

With poor credit you won't be able to get the best available rates, but you can get close. Most subprime lenders offer financing just 1% to 3% above market rates. If you have had severe financial troubles in the last 24 months, like a foreclosure or bankruptcy, expect rates to be much higher.

So even with an adverse credit history, you may still be able to lower your rates. The general rule is that if there is a rate difference of 2 or more points, then it's worthwhile to refinance.

If you are struggling with cash flow issues, refinancing can help you lower your monthly payments, freeing up needed cash. Lower rates will reduce your payments, but so will extending the length of your loan.

Cashing out part of your equity during refinancing can help you secure low rate financing, usually at half the rate of a credit card. With the additional credit, you can consolidate bills or make needed home repairs.

The Difference Is In The Lender

Selecting the right lender is just as important as getting the right loan terms. Financing companies do not all charge the same rate on mortgages. So you can save yourself hundreds, even thousands, by comparing loan offers.

With online financial companies, you can request loan quotes without hurting your credit score with repeated credit inquires. Based on the information you provide, potential lenders send you a loan estimates in minutes. With mortgage broker sites, you can receive multiple offers to make side-by-side comparisons.

Applying online for refinancing can also qualify you for loan discounts with some lenders. Just remember that any rate quoted isn't guaranteed. With rates fluctuating daily, your rate can only be locked in once your application is approved.