|Mortgage Refinance Information|
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.
To see our list of recommended subprime mortgage lenders, visit this page: Recommended Subprime Mortgage Lenders
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.
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Refinance Home Loan and Refinance Home Loans
Refinance home loan lenders are eager to lend money to any individual regardless of credit as long as the homeowner has a fair amount of equity in the home and the home itself is in a condition that can be resold. Refinance home loans are different than a second mortgage or line of credit in that the proceeds from the loan disbursement first pay off the original mortgage loan. The remainder of the refinance home loan proceeds leaves the homeowner to spend the money as they wish. Typically, refinance home loans carry lower interest rates than purchase mortgages.
Keep Your Eye Focused on Treasury Bond Rates To Adjust Your Current Mortgage Rates
Mortgage rates typically are based off the current rates of treasury bonds. Most lenders set their long term mortgage rates in line with 10 and 30-year treasury rates. The reason that they do this is quite simple. Treasury rates are the rates that are used as an index to represent what the future value of money will be by the secondary market and investors. The Federal Reserve Bank will issue these bonds along with an interest rate that it will pay to holder of the bond once it matures. The market, in reflecting economic and inflationary predictions, adjusts the yields. Mortgage rates are then set according to the yields. If the market expects that thing in the future are going to be good with low inflation then the mortgage rates will be lower. If the market forecasts higher inflation then the mortgage interest rates will also rise.
Where To Find The Best Rates For Your Mortgage?
As with all of my articles this will be based on a scenario in my home town. (Which may be similar to yours).
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