Bad credit mortgages are designed to serve consumers with poor or no credit. Now we'd like to clear up some of the myths associated with these projects for you.
You already have the option of applying for a mortgage if you have poor credit, but be aware that all mortgages offered come with costs and fees. The most expensive type of mortgage is the "bad credit mortgage", because bad credit mortgage is very risky. But what you need to understand is that riskier mortgages mean higher costs.
Myths about bad credit Home Mortgages # 2: Does My broker work for me for free?
Answer: There's no way someone works for you for free.
Your mortgage broker may not charge you any standard or initial fees upfront, but you must not assume that your broker is working for you for free because he can pay fees from the lender. It may not be obvious what you're paying, because brokers will largely choose to subsidize their costs by increasing your relative monthly rates.
On Bad Credit Home Mortgage Myth # 3: Are subprime mortgages Really a Good Idea?
Answer: Subprime mortgages are by no means a better idea because they have higher interest rates and charge higher fees.
There is a category of loans known as' prime 'loans, which are intended for borrowers with good credit. And then there's the "subprime" loan, which is defined as the opposite, a loan made to people with poor or no credit and for whom very little is available. In general, risky loans will charge more than other standard loans, and they will each have a corresponding interest rate. Because there are also some consumers with bad credit history who also want to buy a house, so we have some legitimate demand for subprime loans in the market.
On Bad Credit Home Mortgage Myth # 4: Will the loan officer really look out for my best interests?
Answer: In fact, a loan officer does try his best to act in the best interest of the lender.
Loan counselors are affiliated with lenders and work with consumers to find out what's in the lender's best interest. If you want to apply for bad credit housing mortgage loan, then the lender must improve the awareness of examination. But in a few cases, loan advisers may not provide the services that consumers deserve. It's all up to consumers to make sure they understand the problems associated with bad credit home mortgages so that their needs are properly met.
On Bad Credit Home Mortgage Myth 5: Do I really have to offer myself a W2 to qualify for a bad credit mortgage?
Answer: Make sure you qualify for self-employment, investment income, and other non-conventional income.
If you are a consumer who cannot afford a W2 loan, then you can use a low documentation or no documentation bad credit residential mortgage. Because low - or no-document mortgages have slightly higher interest rates.
