This week I talked to someone who was in such a bad financial situation, they actually couldn't refinance their current home with one of the FHA mortgage refinancing options or any other program. They couldn't even get a hard money loan!
After turning this person down for an FHA refinance, do you know what he told me he was going to do for his cash-shortage so he could meet his monthly bills?
He said he was going to go get a payday loan.
I have never gotten a payday loan, but I according to the Center For Responsible Lending, the rates on payday loans are so high, most people actually never get out of the payday-loan-loop.
So what do you do if you have less than perfect credit and are a homeowner and your bills are too high?
Is refinancing an option into an a-paper mortgage program? No.
What about refinancing your home into a sub-prime mortgage program? Maybe, but probably not because there are very few sub-prime mortgage programs available in todays mortgage market.
What about refinancing into an FHA mortgage refinance program? A good option if you will qualify.
What about a payday loan?
According to the Center For Responsible Lending... it is a bad idea. And if the interest rate is over 36%, you just may never recover from the payday loan trap.
So be careful!
