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Bad Credit Mortgage Lender - What to Look For
If you have less than perfect credit and are looking to get approved for a mortgage loan, be careful not to make some common, costly mistakes. When dealing with sub-prime mortgage lenders or bad credit mortgage lenders, many people are taken advantage of because of their eagerness to get approved.
Choosing and settling on a mortgage lender or mortgage broker is a very important decision. Make sure you don't make mistakes that you will regret later. Ask yourself, the mortgage broker or lender these questions before you sign on the dotted line:
1. Is there a pre-payment penalty on the loan? Ask about this as soon as you are told you are approved. A 6 month pre-payment penalty is probably ok, but 1 year, or two years? Over 1 year is too long. Find out how much the pre-payment penalty is. Maybe its not much. But if there is one, its most likely to be so much, that it would defeat the purpose of refinancing the loan before the penalty time is up. If you are get a mortgage loan with a poor credit score, and then make your mortgage payments on time, you are likely to be able to refinance in 6 months to 1 year for a much better interest rate. You don't want to hurt your chances of doing that with a heavy pre-payment penalty. Sometimes brokers will neglect to tell you about one.
2. What will the interest rate be? Sounds obvious, but lock down exact numbers. Don't settle for vague answers on this. Brokers may promise you a low interest rate, but as it gets closer, end up locking you in at a much higher rate. If you are doing a combo loan, 80/20, the second mortgage may end up being the one that has an interest rate that surprisingly jumps up as it gets close to the loan closing. Try to negotiate a lower interest rate, especially if you are going through a mortgage broker, they will usually have some play in this area.
3. Is my mortgage broker being too pushy? If you feel your broker is being too pushy, there may be something in the loan that is not in your best interest. Ask a lot of questions and don't be afraid to start searching elsewhere. When getting a mortgage loan, you don't want to be in too big a hurry.
4. Can I afford the payment even I am not able to refinance for a lower rate within 2-3 years? Many people get into a sub-prime mortgage loan with a higher interest rate, just because they are happy to get approved, only to feel suffocated later, when they cannot refinance and get out from under the high payment. If you don't think you could make the payment for at least the next 2-3 years with no problem, then you shouldn't be getting into the loan.
5. What are my closing costs going to be, exactly? Bad credit mortgage lenders and mortgage brokers know that the person they are extending the loan to doesn't have as many options. These lenders and brokers can sometimes take advantage of that fact by upping the fees at closing. Make sure you see what all of your fees are going to be in writing before you commit to the loan. Compare those fees with other lenders and make sure they are comparable. If there are a little high, try negotiating with your mortgage lender or broker. They will usually be able to make changes there if they choose to.
It helps to choose a bad credit mortgage lender based on a referral based on a referral, one who has a good reputation. Choose a company with a long standing reputation and make sure you feel comfortable working with them.
There are many lenders now, who specialize in bad credit mortgage loans. These are the best lenders to start with.
Written by Carrie Reeder, owner of http://www.abcloanguide.com, an informational website on mortgage loans, with articles and lists of recommended bad credit mortgage lenders.
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Refinance After Bankruptcy
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Reverse Mortgages: When Is One Right For You?
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How Homeowner Can Save Their Home From Foreclosure
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Kippers or Red Herrings?
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Refinance Your House
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The Truth About Shopping for Mortgage Rates
With so much lender advertising focusing just on rates, you may not be aware of the importance in choosing an experienced, reliable loan professional who can match you with the appropriate loan program. Good loan officers and mortgage brokers may quote today's rate when asked, but they will quickly add they need to know more about you to determine the best program for your individual situation.
Revive Mortgage Tenure With Extend Loan Term Remortgage
You are comfortably wedged in a mortgage deal, paying the standard rate of interests year after year. You are most in all probability paying more than required and you don't even know it.
How to Find the Best Home Improvement Loan
If you're looking for the best home improvement loan for your money it can sometimes seem like an uphill climb. You may not know whether the offer that you've received is the best that you can get, or if you should try to find a better offer elsewhere? but you shouldn't let finding the best home improvement loan stress you out so badly.
How Good a Deal Is Your Banks Mortgage Insurance Plan?
When you go to the bank to get a mortgage, you'll inevitably be asked to take out mortgage insurance. The idea behind mortgage insurance is simply that if something happens to you or your spouse then your loan will be paid off which is good news for your family and the bank.
Mortgage: Effective Household Investment for Financial Autonomy
If finances had a copyright, we would have bought it by now. But it is hardly sold anywhere near the place we live.
Mortgage: Rehabilitation Of Financial Helplessness
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Homeowners' insurance: The mortgage connection
A home owners' insurance is the cover for the house against natural calamities as well as liability. This covers the house and its contents but also other personal possessions which the house secures.
Real Estate Tip: Escrow Accounts -- Do You Really Need Them?
If you have a mortgage on your property, whether it's for your personal residence or a real estate investment, chances are you have an escrow account. But if you are working on building wealth through real estate, you may want to take a hard look at your escrow account (or accounts, if you own more than one piece of real estate) and decide if you really need it.
Thought Fixed Rate Will Give You a Respite from the Perils of Variable Rates! Think Again
Slight increases in the interest rates raise your hackles. Tension grips your mind as to how you are going to make the extra payment.
Refinancing Online - Tips For Getting a Low Interest Rate When Applying Online
Refinancing online is a great opportunity to find low interest rates. Online mortgage lenders provide information about rates and fees for easy comparisons.
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