Programs to Refinance With Bad Credit

The programs for refinancing a loan by a bad credit borrower is broadly divided into two namely,

• Conventional Loans
• Combination Loans.

Discussion on every refinancing program for a bad credit borrower is as follows.

• Conventional Loans: Any mortgage loan which does not fall under Federal Housing Administration, Veteran Affairs and Rural Housing Service programs is known as a conventional loan.
• State and Local Authority Housing Program: Housing loan schemes are offered at the lowest of interest rates. Mortgage Credit Certificates are offered at rates lower than the market value and they provide tax deduction for such loans.
• Conforming Loans: Conventional loans may be conforming or non conforming loans. Loans offered in accordance with the terms of Freddie Mac and Fannie Mae are called conforming loans. Other are non conforming loans. Freddie Mac and Fannie Mae have been recently taken over by the government.
• B/C Loans: Those loans offered conforming to the borrowers' credit requirements laid by Freddie Mac and Fannie Mae are called A type loans. B and C loans do not satisfy the requirement.
• Jumbo Loans: Those loans taken beyond the maximum limit fixed by Freddie Mac and Fannie may are called Jumbo Loans.
• Fixed Rate Mortgage Loans: Both interest rates and monthly installments are fixed under this loan.
• Adjustable Rate Mortgage: Interest rates and monthly liability fluctuates along with the market with a ceiling on its upper limit.
• FHA Loan: Federal Housing Administration Loans are part of the US Housing Department offering loans at very low down payments.
• VA Loans: Veteran Affairs loans are offered to veterans and service personal to purchase loans at affordable rates
• RHS Loan Program: Rural Housing Service loans are offered to rural residents and US department of agriculture offers guarantee for the loans taken.

Mark C Brown