Even if you have bad credit, refinance on your existing home is still possible. I know it may be hard to comprehend, you thought you were stuck right where you are; because no one wants to help any one who is down. Usually they do all they can to keep you down. Well, things have changed these days because interest rates are so low your lender may be willing to help without causing too much anguish on your part.
The only thing your lender is interested in is you making your monthly mortgage payment in full and on time. If they have to take a little off the interest to accomplish this fact then they will. They do not want your house. They probably have so many at this point they can't even count them. The last thing they want is one more house.
Ask your lender to help you learn to rebuild your credit rating in order to refinance your house and help you get out from under some bills. If they start seeing you as a person instead of an account number you will benefit. You can save hundreds of dollars a year on your monthly mortgage payment, because the prime interest rate is still so low.
Remember, your lender is not just going to agree to do this right when you ask them to. They will need some information from you to help them make their determination. They will need your income and verification of that income, how much debt you have and all three credit scores before they will even think of saying yes.
As I said the prime rate of interest has fallen recently and this is a positive thing for you if you do need to refinance. You will still probably pay a higher interest rate when you do refinance but take solace in the fact that you will not pay nearly what you would if the interest rate had not gone down at all. If you do not already escrow property taxes or insurance you may be requird to do so with a refinance just like you would be if you were going for a modification of your loan.
If this happens your payment may not change very much at all but you will have the peace of mind in knowing that your property taxes and insurance is taken care of with every monthly payment.
So what happens if your lender says that after careful consideration they still think you are too much of a risk and responds negatively to your application for refinance? The first thing I would do, other than finding ways to make the monthly mortgage payment on time, would be to check with the state to find out how long it will take to foreclose on a house and what to expect.
Then saving money to finance your move has to take precedence over anything else. So keep up with the monthly bills but if your lender is going to foreclose, save the house payment for several months for your new rental. Go over your finances and simplify as much as possible. Get rid of payments you do not need to make and try to reduce the ones you do need to make. Fixing your finances yourself can give you a great sense of relief and accomplishment. Especially if your lender thinks you are too much of a risk, because of your bad credit, refinance with them is out of the question.