Subprime mortgage brokers offer different mortgage loan packages from different lending companies. They can get loans for almost anyone, no matter how bad their credit is. Even though brokers are helpful, you should still ask questions to make sure you're getting the best deal.
- How much do you charge?
Ask how a subprime mortgage broker makes money before you agree to work with them. Sometimes they charge you a fee right away, and sometimes you pay them over time.
Subprime mortgage brokers offer different mortgage loan packages from different lending companies. They can get loans for almost anyone, no matter how bad their credit is. Even though brokers are helpful, you should still ask questions to make sure you're getting the best deal.
- How much do you charge?
Ask how a subprime mortgage broker makes money before you agree to work with them. Sometimes they charge you a fee up front, and sometimes the mortgage company pays them.
Paying fees up front doesn't mean you'll get the best deal, but it does make the broker less reliant on fees from mortgage companies. Instead of looking at who will pay them the most, they look at who will pay you the most.
Even if the mortgage company pays fees, you might still get a good deal. Most brokers can get you better rates, so you still come out on top. When you use this kind of broker, you can also work with more than one broker to find the best deal.
- How much do the loans cost?
Even if brokers give you rate quotes, you should still take the time to look at fees and points. Rates and fees should be added to the APR. It has to be told to you before you sign a contract, so you can really compare. Sometimes the loan with the lowest rate has the most expensive closing costs, so it's not always the best deal.
The prices you're given aren't set in stone. You can bring them down by paying more points or putting down more money. Points are only worth it if you plan to keep the loan for a while.
- Are there fees for paying early or other terms?
Check to see if there are any early payment or other fees. When your credit score goes up, you can often refinance a subprime mortgage. If you want to refinance, check to see if you can pay a point to get rid of the early payment fee.
After two years, some subprime lenders will automatically refinance your loan at a better rate. This can save you a lot of money when it comes time to refinance. Check the rates with other packages, just like you would with any loan offer.
