How to refinance a mortgage with bad credit?

my mortgage co wont help me (gmac) i dont have good credit at all..i have had a few late payments..just had a baby..i dont get paid that much and my husbands work is slow.. i just want to refi!! no cash out..house is worth approx 70K owe about 65K and dont want to pay for a loan modification cuz if i had the money to do that i would be on here asking for suggestions.. oh i dont want any smart a** answers you can keep them to yourself! i just need honest answers from honest people! thank youHow to refinance a mortgage with bad credit?
Hello, don't despair. There are millions in the same situation.





Before you decide to foreclose, what's the market rate rent in your neighborhood? If it's significantly cheaper than your current mortgage plus property taxes, I can understand why it would sound appealing. However, you should try these 2 things before you go that route.





First, forget about refinancing. GMAC (or any other lender) will NOT refinance you with recent mortgage lates, bad credit and low income. There are recent programs (such as with B of A) that will allow people under water to refinance at very good rates but GMAC doesn't participate in that program.





Your options are:





1. Call GMAC for loan modification. Tell them your current situation, honest income and expenses and they'll let you know if you qualify. It takes months but it's worth the effort. I've done it with WAMU/CHASE. My friends/clients have done it themselves and lowered their payments and kept their homes. Now, if your debt to income ratio is waaaaay off the chart and they see that there's no way you can really afford even a lowered payment, they'll deny you





2. if they deny you, try short sale. that's much better on your credit than a foreclosure. With foreclosure and shortsale, whatever amount the bank loses on that transaction, you'll get a 1099 at the end of the year which you'll have to pay taxes on. It counts almost as income that you have to pay the IRS. The only way to avoid that is through a BK. Remember, with foreclosure, you can't buy a home for 3 years even with FHA.





Of course the last option is a BK. Unless you HAVE to, don't do it. It's expensive, first of all and kills your credit. However, if you have to, then, you have to. It's not the end of the world.





Either way, you have to think of yourself and the family. Hold onto every dollar you have. Don't pay anyone to try the modification. Do it yourself. I did it myself and it was easy, just time consuming. Be prepared to follow up constantly but it's worth it.How to refinance a mortgage with bad credit?
I would avoid foreclosure if at all possible. Since you have bad credit with GMAC, have you looked into refinancing with another bank or mortgage company. Also it never hurts to try working on your credit to help in the future. I would ask GMAC if they can help you on removing your late payments, if not try disputing anything on your credit report that is pulling you down.





Selling and foreclosure don't seem like much of an option, but I would try to keep on the payments and if you don't need refinance, don't refinance. Shop around and see what you can get and in the meantime work on removing negative items off your credit report.
You will not get a single cent with the picture you described. You owe more than mortgagors give in the percentage of your house that is not already mortgaged. A second loan usually requires more than you are borrowing to be equity. You say you have next to no equity and bad credit. Banks are not in the business of giving money away. You need to find another way to get money. It will not be available from your equity in the house.





You actually owe more than you would get for your house when you figure in that nobody pays what a house is worth. If it is worth 70K, it would sell in today's market for 60K.





Sorry I couldn't be more positive but that is the reality of what is going on in the mortgage market now.
i doubt anyone can guide you on that; since you are not qualified. AT this time.





an alternative could be to sell Part of your house to an investor.


[with a buy back clause]
Well a refinance will cost at least $1000, so it's hardly free. And when you're applying to refinance, as far as the bank is concerned, it's just the same as when you apply for a mortgage the first time.


With the tight credit these days, and the fact that you've only got $5000 in equity in the house (granted, it's better than being negative), and poor credit, I can't imagine any bank offering you a mortgage, at least at a reasonable rate. They know that you're a risk to walk away since the cost of selling your house (real estate fees) will be more than $5000.


I guess the best answer is to just keep the status quo (why do you feel the need to refinance anyway?) or to try to sell the house if the payments are too much and then rent.