Everyone wants to own their own home, but waiting merely one year to refinance your home with bad credit could save you nearly a million dollars. Sounds like more than most of us make in a year, but it’s a typical amount paid by bad credit mobile home refinance or anyone that wants to refinance a home with bad credit.

Home refinance for bad credit is increasingly becoming popular. Why? Because most of the nation has suffered job loss, income depletion and are fighting to make payments on an adjustable rate mortgage. The costs are skyrocketing and creditors are promising that refinancing is the answer. What they don’t tell you is that a mortgage loan with bad credit will cost about $890,000 – $1,000,000 depending on the amount of the loan.

The typical home cost is about $250,000. A mortgage at the average interest of around 7% would cost the borrower about $350,000 worth of interest payments in a 30 year amortization period. Sounds like a lot doesn’t it? But a bad credit home refinance would, at the typical bad credit interest rate of 15%, cost the borrower $888,000. Even at only 10% interest the interest paid would be nearly $540,000; about 1/3 more than someone with good credit. How does one avoid paying all that extra cost? By waiting and improving their credit score.

A year spent fixing your credit can save you nearly $200,000, by reducing the interest rate from 15% to 10%. There are numerous simple ways to achieve your goal. You can visit a credit counselor, who will most likely consolidate your debts into one payment. Pay down most of your debts and reducing your debt to income ratio (the percentage of your debt divided by your income, monthly). Apply for, and use, a secured credit card.

A credit counselor works with any past due or overextended debts you might have. They consolidate all of those bills into one payment after negotiating with the creditors. Credit counselors can be unscrupulous, it’s important to check with the Better Business Bureau in regards to anyone you visit.

If you’re not interested in working with a credit counselor, you can pay down a few debts on your own. It’s important to get your debt to income ratio below 36%, which is the figure most lenders look at.

A secured credit card another way to increase your credit score. If you’re unable to get a regular credit card, a secured credit card will help. Some secure card applications charge a fee for the application. There are also insurance fees among other types of fees. Be careful which cards you choose.

The best option for rebuilding your credit is to do a combination of all three. Visit a credit counselor to consolidate as much debt as possible. Pay down your debts as much as possible, even if it means getting a second job. Get a secured card and make all the payments in a timely manner. In the end, by waiting and planning ahead, you can save nearly $200,000 or more.

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