Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime MortgagesWritten by Carrie Reeder
Sub-prime mortgages are not that much different from average mortgages. They have interest rates, points, and fees. They can be compared online, and they have seasonal trends. The only real difference is that as a borrower with a less than stellar credit record, you will have to pay a slightly higher rate for lenderís increased risk. What is important is that you prepare yourself with information about sub-prime mortgages and compare lending companies to make sure you get best deal.
Paying For Risk
If you have bad credit or declared bankruptcy, a mortgage lender is taking a big risk that you will pay back loan. People with bad credit are seven times more likely to default on loans, so lenders make up for this loss with higher interest rates and fees. However, some companies take advantage of people with poor credit, so you should compare companies.
You donít have to meet with a lender face to face to negotiate a mortgage loan. You can go online and compare financing packages from multiple bidders by supplying some personal information. Rates and fees are different between lending companies, so it pays to shop.
The Mortgage Season
Home Loans For People With Adverse Credit HistoryWritten by Carrie Reeder
Whether you are planning to purchase a home for first time or refinance an existing mortgage, plan on comparing lending companies before you accept a financing offer if you have adverse credit history. Sub prime lenders specialize in offering loans to people who have a high-risk credit history. In return for accepting this risk, they charge higher rates and fees.
But not all sub prime lending companies offer competitive rates. Lenders can stack fees into loan or charge excessively high interest rates, so it is best to compare financing offers.
Mortgage websites offer a convenient and competitive way to gather financing quotes. Through such websites, lending companies know they are in direct competition with others, so they offer their best quote. You can also complete your loan application online once you have chosen a competitive offer.
Interest rates can vary a couple of percents between lending companies. Over lifetime of your loan that can add up to thousands of dollars. When comparing rates, make sure that you gave out same information. Differences in loan amount, down payment, and income level affect rates.
Look At The Fees