Refinancing Your Mortgage: Inaction Costs Too Much if You Need to Refinance

by Gabriel Traverso
CMR Columnist

Rates are going up and lenders are tightening their standards on bad credit mortgages. It's time to make a move.

Bad Credit Got You Down?

You're not alone! There are many homeowners in California with poor or bad credit who are in the same boat. The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending May 18 and refinancing is up almost 2% from the previous week. Regardless of whether you've been counting on home appreciation in order to refinance your mortgage again or you've recently lost your job, if your current mortgage doesn't fit your needs, it's time to start shopping around for refinancing.

Rates are Up, Lenders are Getting Strict

According to the MBA survey, average rates for 30-year and 15-year fixed-rate mortgages each went up by at least a tenth of a percent and the rates for one-year adjustable rate mortgages (ARMs) jumped from 5.61% to 5.72%. HSH Associates reported recently that 56% of the loan officers in an April Federal Reserve survey are writing bad credit mortgages under "somewhat or considerably tighter" circumstances. The Associated Press reports that 30 lenders who specialized in bad credit mortgages and refinancing have gone bankrupt this year.

"I Need Refinancing, What Does All This Mean?"

If you have bad credit, you could be facing fewer options than you did a year or two ago. With some lenders out of the picture, due to bankruptcy or tighter lending practices, you need to spend more time shopping around for your mortgage refinance. With rates going up, you should move quickly. If your mortgage payments are getting hard to handle, then you really have no time to waste. The worst thing you could do right now is nothing.

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