There are some great things you could do with the money you'd save if you refinanced your mortgage. You could set aside the difference into a savings account for your child's college tuition, add it to your retirement savings, or save it for a down payment on that cottage in Tuscany you've been dreaming of. Whatever your goals are, a few extra bucks a month can't hurt, right? But what if you have a low credit score, and aren't eligible for a reduced interest rate on your mortgage?
What do you do then?
Well, for starters, do what's necessary in order to raise your credit score. Yes, it will take some time but it's not impossible. And even if it means you can't refinance for a while, you'll end up better off in the long run if you improve your score. Take a look at your budget, or create one if you don't have it. Make sure that you're paying your bills on time, every time. For some of you, it might help to set up automatic payments from your checking accounts. This saves you from those last-minute dashes to the post office for stamps, and will help you pay on time.
Once you've got your monthly bills covered, then shoot for paying a little extra on your mortgage payment. Even an extra $50 towards your principal can shave a few years off your mortgage and save you thousands of dollars in interest.
If things are just too much, however, consider talking to a debt counselor or financial advisor. They can help get you straightened around and going in the right direction.
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