Bad Credit Mortgage Lender - What to Look For

If you have less than perfect credit and are looking to get approved for a mortgage loan, be careful not to make some common, costly mistakes. When dealing with sub-prime mortgage lenders or bad credit mortgage lenders, many people are taken advantage of because of their eagerness to get approved.

Choosing and settling on a mortgage lender or mortgage broker is a very important decision. Make sure you don't make mistakes that you will regret later. Ask yourself, the mortgage broker or lender these questions before you sign on the dotted line:

1. Is there a pre-payment penalty on the loan? Ask about this as soon as you are told you are approved. A 6 month pre-payment penalty is probably ok, but 1 year, or two years? Over 1 year is too long. Find out how much the pre-payment penalty is. Maybe its not much. But if there is one, its most likely to be so much, that it would defeat the purpose of refinancing the loan before the penalty time is up. If you are get a mortgage loan with a poor credit score, and then make your mortgage payments on time, you are likely to be able to refinance in 6 months to 1 year for a much better interest rate. You don't want to hurt your chances of doing that with a heavy pre-payment penalty. Sometimes brokers will neglect to tell you about one.

2. What will the interest rate be? Sounds obvious, but lock down exact numbers. Don't settle for vague answers on this. Brokers may promise you a low interest rate, but as it gets closer, end up locking you in at a much higher rate. If you are doing a combo loan, 80/20, the second mortgage may end up being the one that has an interest rate that surprisingly jumps up as it gets close to the loan closing. Try to negotiate a lower interest rate, especially if you are going through a mortgage broker, they will usually have some play in this area.

3. Is my mortgage broker being too pushy? If you feel your broker is being too pushy, there may be something in the loan that is not in your best interest. Ask a lot of questions and don't be afraid to start searching elsewhere. When getting a mortgage loan, you don't want to be in too big a hurry.

4. Can I afford the payment even I am not able to refinance for a lower rate within 2-3 years? Many people get into a sub-prime mortgage loan with a higher interest rate, just because they are happy to get approved, only to feel suffocated later, when they cannot refinance and get out from under the high payment. If you don't think you could make the payment for at least the next 2-3 years with no problem, then you shouldn't be getting into the loan.

5. What are my closing costs going to be, exactly? Bad credit mortgage lenders and mortgage brokers know that the person they are extending the loan to doesn't have as many options. These lenders and brokers can sometimes take advantage of that fact by upping the fees at closing. Make sure you see what all of your fees are going to be in writing before you commit to the loan. Compare those fees with other lenders and make sure they are comparable. If there are a little high, try negotiating with your mortgage lender or broker. They will usually be able to make changes there if they choose to.

It helps to choose a bad credit mortgage lender based on a referral based on a referral, one who has a good reputation. Choose a company with a long standing reputation and make sure you feel comfortable working with them.

There are many lenders now, who specialize in bad credit mortgage loans. These are the best lenders to start with.

Written by Carrie Reeder, owner of http://www.abcloanguide.com, an informational website on mortgage loans, with articles and lists of recommended bad credit mortgage lenders.

---

Home Mortgage Interest Rates: How to Compare

Whether you are looking to purchase your first home, sell... Read More

Non-conforming Home Loans vs Conforming Loans

The simple definition of a "non-conforming home loan" is: You... Read More

A Personal Mortgage Experience

I don't know what the mortgage situation is around the... Read More

Buying a Home With Bad Credit - Get Approved With a Recent Bankruptcy or Foreclosure

A few years ago, if you had a bankruptcy or... Read More

Securing a US Commercial Mortgage

What's the most efficient way to secure a US Commercial... Read More

5 Things In Selecting The Best Mortgage - You Should Know

Your goal is not only to find the best rates... Read More

Life of an Escrow

Escrow is one of the last stages in the purchase... Read More

Credit Problems? With a Subprime Mortgage Lender, Poor Credit is Not a Problem

Have you been turned down for a home loan recently... Read More

Think You Cant Get a Mortgage?

You've finally found that dream home that you have always... Read More

Home Equity ? Let the Market Eliminate Your Private Mortgage Insurance

In decades past, most people who were interested in obtaining... Read More

Bankruptcy and Buying a Home

Filing bankruptcy is a stressful time in a person's life.... Read More

Home Loans -- Federal Regulators Warn Lenders to Be More Careful

Federal banking regulators have recently expressed some concern over the... Read More

Which is Better? Fixed-Rate or Adjustable-Rate Mortgages

The answer depends on several factors including your financial situation.... Read More

Mortgage Loan Most Bankers Wont Give May Be Exactly What You Need to Buy or Refinance Your Home

A few years ago, a loan officer who worked for... Read More

Home Mortgage Refinancing - Things to Consider When Looking to Get Cash Out on a Refinance

When you refinance your home mortgage, lenders often tempt you... Read More

Unlock your Home Loan Piggy Bank

With the recent sharp increase in property values your current... Read More

Mortgage Loan Information - Know The Basics When You Refinance or Purchase a Home

If you are currently looking for a new home, chances... Read More

What You Dont Know About The Real Estate Process, Some Inside Secrets

Some people in the real estate industry have a terrible... Read More

Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage

Adjustable rate mortgages can be very tempting to home buyers,... Read More

Refinancing Your Home - How and Why?

Chances are you may need a little extra money to... Read More

Refinancing Your Mortgage Can Open Up A Lot Of Options For You And Your Family

It can happen to anyone, the roof is leaking, the... Read More

Mortgage Tips For The Frantic

It is a curious fact of human nature that people... Read More

Mortgage Basics for First Time Home Buyers

Anyone planning to take out a mortgage for the first... Read More

Refinancing Your Home Mortgage - Get Up To 125% Cash From Your Homes Value

With the low interest rates being offered by lenders today,... Read More

Comparing The True Cost Of Obtaining A Home Loan

Home buyers are often confused about where to begin in... Read More

FHA Mortgage: Whats the Best Way to Show an Underwriter that Youre Ready to Buy a House?

Mortgage underwriters can be a suspicious bunch. If you have... Read More

Mortgage Loans For People With Adverse Credit - How Much Should You Borrow

"How much should you borrow?" is a question people with... Read More

Home Equity Line of Credit - Finding The Best Home Equity Lender

Borrowing against the value of your home using a revolving... Read More

Making Sense of Mortgage Speak

Applying for a home loan can be overwhelming. You will... Read More

Home Equity Line of Credit ? Great Idea for Rainy Day Emergencies

Most Americans tend to live on a paycheck-to-paycheck basis, and... Read More

Mortgage Soup

Looking for home mortgage loans can get confusing with the... Read More

Refinance Your Home Equity Loan

Refinancing your home equity loan is an excellent way to... Read More

Home Equity Loans

A home equity loan allows you to cash-in on the... Read More