If you have bad credit, it's hard to get a mortgage with a low interest rate. When people finance a home, they care most about getting a good financing package, and for good reason. The mortgage rate on a loan can make a big difference in how much a monthly mortgage payment is. If your credit is good, it's easy to get the best low rate. But if you have bad credit, you might need to work a little harder to find a good rate.
Rates and terms of mortgages can be compared and contrasted.
Smart shoppers know how important it is to look around for the best deal. This rule applies to buying cars, clothes, shoes, and everything else. Homes are our biggest expense. Sadly, many people who want to buy a home don't spend much time looking for the best financing package. This is a very bad idea. When looking for a mortgage, it's important to get quotes from more than one lender and look over each one carefully. People who want to buy a house quickly make the mistake of taking the first offer they get. But if you compare mortgage rates, terms, and services, you could save a lot of money and lower your mortgage payment.
Subprime Lender Loan Application
There are a lot of banks that focus on home mortgage loans. Banks, mortgage companies, credit unions, etc., are all examples. If you have good credit, you may be able to get a mortgage with a low rate from one of these banks. If you have bad credit, however, these lenders may charge you extra fees and a very high interest rate. Because you have bad credit, it's more likely that you won't pay the mortgage. So, lenders raise the rate of interest. This lets them get their money back faster.
If you got a loan from a subprime lender, your interest rate might be about the same as what the market rate is right now. You can expect to pay about one or two points more than someone with great credit, but you won't pay three points or more more than current rates.
The best way to find a reliable sub prime lender is to work with an online mortgage broker. Brokers will find you a lender who specialises in mortgages that fit your needs based on the information you give on your application.
