COLUMBUS, Ohio-March 10, 2009-(Business Wire)-- Excessive credit card debt threatens your security, regardless of your credit rating. Most Americans maintain balances of around $2000. But one in 20 households carry $8000 credit card balances and in today`s uncertain economic climate if payments fall behind, these balances can quickly ruin your good credit rating. But FHA mortgage refinance options can help you reduce or eliminate your outstanding debt and increase your financial security.

Ron and Sheila McClain are a Connecticut couple living on a fixed income who have a solid history of on-time payments and excellent credit ratings. Facing ongoing medical insurance bills, the couple became increasingly worried about making timely credit card payments and the amount of their monthly interest payments as their food and fuel costs skyrocketed last fall. "When we had another high-priced fuel delivery in December, I was anxious about how we would keep paying all of our bills on time," says Mrs. McClain.

On Christmas Eve, the McClains received a flyer about a potential refinance from Residential Finance Corp.(http://www.residentialfinance.com), a mortgage refinance lender specializing in FHA mortgage loans. "We decided to find out whether we could lower our monthly payment by refinancing our home loan at a better interest rate," says Mrs. McClain. "We spoke with Bradley Bunin, a senior loan officer at RFC who explained that we had many options. We could just refinance at 30 years and cut a few hundred dollars off our monthly payment, or we could get cash back to pay off our bills and set some aside in savings as a security cushion, and still reduce our monthly payments."

Bunin says, "I thoroughly explained each option and all of the steps involved, to help the McClains decide what home loan options made the most sense for their situation."

"Even though we had credit card debt, our good credit enabled us to lock in an excellent mortgage rate-our new 25-year fixed-rate mortgage is under 5 percent, and we have the option to pay it off in 12 years," says Mrs. McClain. "We also opted to get cash out to pay off our credit cards and medical insurance bills. Now we can breathe easier."

Bunin notes that most homeowners he works with are seeking to refinance their mortgage loan at a better rate, but borrowers don`t realize that they have options to reduce or eliminate their debt at the same time. Even homeowners with credit issues can often qualify for an FHA mortgage loan and get cash out to pay off their debts. Brad cautions homeowners to understand how credit card debt can affect their overall credit rating. He explains what you need to know about cash out options and why it makes sense to reduce or eliminate your credit card debt now:

* If you`re not planning to move anytime soon, it may make sense to leverage your home to get cash out and pay off your higher-interest debt-despite the current slump, home values tend to appreciate over time

* Refinancing and paying off outstanding debts frees up extra cash each month that can be used to build a savings nest egg for extra security-or to pay down your mortgage faster

* Unlike credit card interest, home mortgage interest is usually tax-deductible-check with your tax specialist to confirm your specific situation

* Paying off credit card debt can usually help improve and sometimes repair your credit rating

* Credit cards are open-ended debt, meaning your interest rate, minimum monthly payment and the terms of your credit agreement can be changed at any time

 * Some credit card companies have begun to adjust your interest rates using demographic information not directly related to your own credit record, such as localized delinquency and foreclosure rates * Some credit card issuers use and share your payment history and delinquency in order to increase your interest rate

* A nonpayment report remains in your credit record for years and can ruin your chances to qualify for other types of loans such as auto and home loans, including refinance.

"FHA refinancing is helping many American homeowners like the McClains find new financial security in today`s uncertain times," adds Bunin. "An FHA mortgage loan lets you borrow up to 95-percent of your home`s appraised value to pay for unsecured debt. You can lower your monthly payments, be debt free again, enjoy higher tax deductions and even shorten the term of your mortgage."

About Residential Finance Corporation: Residential Finance Corporation (RFC) is the nation`s premier home mortgage lender specializing in FHA mortgage refinance. Founded in 1997 and now serving 26 states, RFC is "Full Eagle" certified by the U.S. Department of Housing and Urban Development (HUD), offering refinancing borrowers the security and great rates of government-insured home mortgage loans. RFC`s investor relationships include some of the nation`s largest and most diverse investment banks. Headquartered in Columbus, OH with offices in Tampa, FL, and numerous regional offices, RFC employs hundreds of highly-trained Home Loan Consultants with the knowledge and dedication to work closely with borrowers to help them find the right home mortgage loan options--with the best mortgage rates and terms--to meet each homeowner`s unique needs. For more information, contact Jessica Manna,CMO, at 614-255-4317.

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