A recent decline in mortgage rates has driven people to refinance their existing home loans in order to lower monthly payments and/or capture a fixed interest rate. This attractive financial option is not exclusively reserved for borrowers with established credit. Homeowners suffering from poor credit may also reap the benefits of refinancing their mortgage.

Refinancing is very similar to taking out the initial mortgage, insomuch as the fees and costs are comparable. To save on charges, specifically the closing costs, it's often wise to apply for the new home loan with your current lender, for he may waive some of the existing fees.

If the borrower wishes to take advantage of an option that requests little or no closing costs, he/she may be burdened with a marginally higher interest rate. However, the homeowner is typically still likely to benefit, especially if they plan on moving in under three years.

Another option entails the inclusion of the closing costs into the loan itself. The total amount of the loan will inherently increase, but the borrower will not have

to pay the closing fees out of his/her own pocket, thus benefiting those who often find themselves low on cash (i.e. someone with poor credit).

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