A lot of options for ‘bad credit home mortgage refinance’ are available these days for people who are unable to pay as per their current installment structure and who are considering for refinancing their homes. Typically, mortgage refinance is recommended only when it offers a rate which is at least 2% lower than that of the original mortgage.

Home mortgage refinancing can be availed through four methods as explained below:

1. Cash-out refinancing: The borrower renews the mortgage for an amount which is greater than the amount owed at the time of refinancing. The difference can be cashed out and can be utilized for home improvements and increasing its value or for paying excessive credit card borrowings.

2. Low fixed-rate refinancing: This option can be considered if the borrower already has a low rate ARM or high interest fixed rate mortgages. This is to be ensured that the percentage difference is at least equal to the closing costs and fees related to the home refinance loan.

3. Long term refinance loan: This mode of refinancing can be availed if you are finding it difficult to pay your monthly mortgage installments. For this, your home should have ample equity built-up. Besides, you may be required to pay for the refinancing costs and fees.

4. Short term refinance loan: Those among you who plan to build equity on their homes and then immediately own it, this option is for you. The monthly mortgage payments are scheduled to increase but more money would have to be contributed towards prinicipal. You can thus avail larger tax deduction benefits on interest paid.

The bottom line is, if you have adequate equity in your home, you can shift to short term refinance from a long term one without having any significant rise in your monthly mortgage installments.