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Subprime Mortgage Lenders - Helpful Tips When Getting a Subprime Mortgage Loan
If you have bad credit history, no down payment or difficult to prove income
and are looking to get approved for a home mortgage loan, you will probably
need to look at subprime mortgage lenders to help you. To see a list of
our recommended subprime mortgage lenders you can click on the link below.
There are a few things to
know about subprime mortgages lenders. They specialize
in providing mortgage loans for people with less than ideal
situations, whether it be difficult to prove income, low
or poor credit scores (most often the case with subprime
mortgages), or no down payment (this factor alone will
not necessarily put you in the subprime loan category).
The interest rate on a subprime
mortgage loans will be higher than any other type of mortgage
loan where credit, income and down payment are all optimal.
However, with subprime mortgage loans, as a borrower, you
need to be careful about a few things when dealing with
subprime mortgage lenders.
The interest rate with subprime
mortgages can vary greatly. There are some subprime mortgage
lenders that, for the same set of qualifications, can offer
an interest rate of say, 7%, which is a little above average,
and then there will be others who will quote 9-12% or more.
Now, if this is all for the same qualifications, you could
be talking about hundreds of dollars a month extra in payments
just because you are not getting a fair interest rate for
your qualification. This is where the borrower needs to
be careful. Make sure you are getting the best interest
rate possible with your subprime lender. Some subprime
lenders take advantage of borrowers with bad credit or
hard to approve situations, and they charge much more in
interest than what is fair for to the borrower.
Another way subprime mortgage
lenders can take advantage of unsuspecting borrowers is
by the lender having a pre-payment penalty on the loan
that is unreasonable and not fair to the borrower, based
on their qualifications. A typical subprime mortgage loan
will have a 6 month to a 2 year pre-payment penalty. However,
sometimes a subprime lender will offer a loan with a 3
year or higher pre-payment penalty. That is too high, I
think a 2 year pre-payment penalty is high, but any higher
than that, and you should probably keep looking for a new
lender.
Other than a couple of things
to be careful of when dealing with subprime lenders, getting
approved, even with a slightly higher interest rate, can
be a really great thing for you to buy the home you want.
Carrie Reeder is the owner
of ABC
Loan Guide. It is an informational website about various
types of loans. The site has informative loan articles
and the latest finance news.
Our Recommended Bad Credit Mortgage Lenders Online:
Mtg Lenders For People With Credit Problems:
-Updated 2008-:
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