People, even those with bad credit, have options with sub-prime mortgage loans. Subprime lenders don't have to follow standard rules for underwriting, so they can work with anyone, no matter what their credit history is like. They can also offer more flexible terms than regular lenders.
How to Get Approved for Bad Credit Loans
Basically, anyone can get a loan from a company that works with people with bad credit. You can apply with a sub-prime lender even if you have bad credit or just went through bankruptcy.
They also help people who have great credit but need loans with more flexibility. To get a jumbo loan, for example, you will have to work with a subprime lender if you want a loan that is more than what the conventional caps allow. With sub-prime companies, it is also easier to get a refinance with 100% cash out.
Options for refinancing with sub-prime lenders
If you refinance your current mortgage, your rates and monthly payments should go down. This is something that subprime lenders can do, and they can also give you ways to get cash. So, you can usually cash out all or part of your equity at lower rates than if you got a second mortgage.
If you have an adjustable rate mortgage, refinancing can also help you get a better cap. Just remember that if your caps are too low, it could make your loan last longer. When talking about caps, it's important to read the fine print and understand how they will affect the length of your loan.
Shopping for a company to lend you money
Give yourself enough time to shop around for your next mortgage company so you can be sure you're getting the best deal. Rates can vary a lot between subprime lenders, so you should look at more than one. Also, keep in mind that a lot of traditional lenders also offer sub-prime loans. So now you have more options than ever.
Ask for loan estimates on the same refinancing package to get the most out of your research. So, you can quickly compare numbers that are the same. Also look for any extra costs, such as fees for paying early. Sometimes, a quick talk with the lender can get rid of these fees.
The process of refinancing will go faster if you look for information about lenders on the Internet. You can get approved for a new mortgage quickly and start saving money right away.
