Just because times are tough for lenders doesn't mean that you should be shy about pursuing a mortgage refinance. For a variety of reasons, many lenders will welcome your business with open arms, even if your credit is less than perfect.

The fallout from the subprime mortgage crisis has affected the entire lending industry. To avoid any future problems with poor credit borrowers, many lenders are tightening their guidelines, causing a significant decrease in the refinance market. Nevertheless, there are several reasons why you still can-and should-refinance in a tight mortgage market.

Lenders like to keep loans out of foreclosure

If you're in rough financial shape, and a debt consolidation loan is the only thing that will pull you out of the red, contact your current lender. Talk to them about your financial problems, and show them how you think a mortgage refinance could improve your situation. If the lender sees that the alternative is foreclosing on your loan, it may agree to the deal. Lenders have had their fair share of foreclosures in recent times, and they'll be eager to avoid another one.

A boost for business

Loan production has been down for lenders lately, and they're eager for new mortgages. However, they can't grant miracles. They won't approve a loan if your credit is abysmal, or you don't have enough equity in your home to make the deal possible. But if you do have some equity and your credit is relatively good, a lender may leap at the opportunity.

Shop around

Ask a variety of lenders if they'll help you. The Internet is crawling with lenders, and you'll probably find scores of them listed in your yellow pages, as well. Shop around, and don't be discouraged if the first or second lender says no. With so many different banks and credit unions vying for your business if you're a good credit risk, you're bound to find a lender who's willing to help.

Assume the worst is over

Don't be scared off by the stories in the media of lenders tightening their lending guidelines. If you look hard enough, you may find financial institutions that aren't quite so stringent. They could be eager to hand out a mortgage refinance, and might be willing to work with you even if your credit is somewhat damaged. The only way you'll know for sure is to ignore newspaper headlines, and call lenders for yourself.

A tight market shouldn't stop a homeowner from searching for a mortgage refinance. By shopping around, you can find a lender who's eager to help a homeowner-especially one who wants to save money and improve his financial situation. The mortgage industry has definitely taken on some water over the past year or two, but it's far from sunk. Set your sails for a mortgage refinance. Chances are very good that you'll find a lender willing to give you safe harbor.