Subprime Mortgage Lenders – Some Important Information
Subprime mortgage lenders offer mortgage loans to people who have less than adequate credit. Your credit history can be spoiled by any defaults in payment, bankruptcies, delayed payments, liens or County Court Judgments (CCJs). As a result, you cannot become eligible for prime mortgage loans with an imperfect credit history. The subprime mortgage loans garnered significant popularity throughout the 1990s. Usually, a mortgage lender can provide prime mortgage loans or subprime mortgage loans or both of them. Normally, the borrower has to pay a higher repayment amount for subprime mortgage loans. Therefore, a borrower who is eligible for a prime mortgage loan should attempt to stay away from subprime mortgage loans at all costs.
Your credit history helps the lenders determine your capacity to repay the loan. An imperfect or poor credit history is considered by the mortgage lenders as more speculative. This is the reason why a higher repayment amount is taken from the subprime mortgage borrowers. A borrower who does not have a credit history at all can also avail a subprime mortgage loan. If there are wrong details on your credit report, that would also harm your credit history. For the purpose of mending a poor credit score, you can send an application to the credit bureaus for rectifying the incorrect data.
First of all, you have to ask for a copy of your credit report from the major credit bureaus. Secondly, you should pay off any outstanding amount that is documented in your credit report. It is always advisable that you repay any outstanding amount carrying the maximum rate of interest at the beginning. Subsequently, you should search for the incorrect details. For instance, a loan was obtained by another individual and it was wrongly recorded against your name. Ultimately, you request the credit bureaus to rectify the erroneous data. Borrowers who have a good credit score can become eligible for prime mortgage loans with a more reasonable interest rate. On certain occasions, an eligible borrower acknowledges a subprime mortgage loan inadvertently. Hence, it is essential to differentiate between prime and subprime mortgage loans. A clear signal of a subprime mortgage loan is that the interest rates and fees are more than normal. If you have a flawed credit history, you can still obtain a mortgage loan from the subprime lenders. Thus, if you are an ineligible borrower, there is no need to worry.
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