by: Dan Lewis
Undoubtedly, you?ve heard the radio commercial claiming you can get a mortgage despite having bad credit. Bad credit mortgages are better known as subprime mortgages.
Subprime
?Subprime? is a euphemism for a borrower who simply doesn?t qualify for a traditional home mortgage.
Subprime loans used to be very difficult to get, but things changed in the 1990?s. Banks began to realize there were a lot of borrowers with less than stellar credit or other problems. More borrowers meant more revenues, so banks started creating subprime mortgages and the game was on. As a result of these new loans, home ownership in the United States has risen to all time highs.
One of the biggest determinants in qualifying for a loan is your credit score. A borrower?s credit history is analyzed using a ?FICO? score, named after Fair Isaac and Company, Inc. Generally, a FICO score below 620 is considered an indication of bad credit. The borrower is then classified as a subprime borrower.
Importantly, a FICO score below 620 is not the only reason a person may be classified as subprime. An infrequent borrowing history, new employment position or expensive home may also key the designation. In fact, nearly 50 percent of subprime borrowers have FICO scores above 620.
When a lender writes a mortgage, it is betting on whether the borrower will repay the loan completely and in a timely manner. The better your credit score, employment history and so, the better deal you will get from the lender. Obviously, subprime borrowers aren?t going to get the best deal. Instead, a lender may require a larger down payment and will certainly designate a higher interest rate than given to ?good? borrowers.
In addition, subprime borrowers may have to pay points just to get the loan.
The trade off of all of this, of course, is that you get a loan to buy a home. Home ownership has consistently proved to be one of the best long-term investments in the United States. While Americans are criticized for failing to save money, they are effectively doing so by purchasing homes and building equity in them.
Should you apply for a subprime loan if you have less than stellar credit or other problems? There is no right answer, so you should consider sitting down with an independent mortgage broker to analyze your situation.
About The Author
Dan Lewis is with http://www.gwhomeloans.com - a San Diego mortgage brokers providing San Diego home loans. Visit http://www.gwhomeloans.com/services.html to learn more about options on San Diego mortgages from a San Diego mortgage broker company.
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Mortgages: What You Need To Know
Mortgages: What You Need To Know
by: Marvin Jones
A mortgage is legal agreement or contract that says that a party has agreed to put up a property, a house or a piece of real estate, as security to get a loan. By doing this, the person getting a loan can buy a piece of property that he initially cannot afford. Still, if by any chance, he cannot pay for the loan, the bank will have to foreclose the property and resell it to others.
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As shown by the name, fixed-rate mortgage has an interest rate that stays the same all throughout the life of the loan. If for example the loan is termed for 10 years, then the interest rate will stay...
Mortgages: What You Need To Know
Mortgages > Mortgages: What You Need To Know
Online Mortgage in UK - Introducing The Best Mortgage Plan Across UK
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Mortgages > Online Mortgage in UK - Introducing The Best Mortgage Plan Across UK
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by: Norman Fleming
A Second Mortgage is a Property Lien placed behind a First Mortgage
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Historically the total amount of debt from the first and second mortgage combined could not be more than 80% of the total market value of the home. However, record low interest rates and a competitive lenders marketplace have created a lending environment where some lenders are approving second mortgages that, when combined with first mortgage balance, is totaling as high as 130% of the home value.
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Understanding A Second Mortgage
Mortgages > Understanding A Second Mortgage
Home Loans and Mortgages ? Tips to Avoid Foreclosure
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Today?s real estate market is a volatile one; prices are at record levels and Interest rates are favorable, but foreclosures are increasing. Wages haven?t kept up with home prices and some buyers who had to stretch to find a way to obtain a mortgage in the first place are having trouble making their payments. Usually, if a buyer cannot meet his or her mortgage obligation, the lender forecloses, taking the home and leaving the buyer without a place to live and a tarnished credit record. If you are having problems paying your mortgage, can you avoid this scenario?
Depending on your type of mortgage and your lender, you may have other options. Most lenders, wary of rising foreclosure rates, would rather work out some sort of solution than take your home. Lenders are in the business of lending money, not selling houses, and the process of foreclosure is a tedious one that most...
Home Loans and Mortgages ? Tips to Avoid Foreclosure
Mortgages > Home Loans and Mortgages ? Tips to Avoid Foreclosure
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Here is a great way to get in at the beginning of a trend. If you?ve...
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Mortgages > Home Business Exposure on Yahoo!
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Have you ever had renovations or alterations done to your property? Then you are fully aware of the amount of fine dust that is generated and manages to get absolutely everywhere even in places far removed from the actual working area. You then spend hours, days and possibly weeks attempting to remove this dust. Is there a much faster route to dust removal?
There most certainly is and it means following...
Mortgages Builder?s Dust ? Removing It Subprime Mortgages ? Information
Mortgages > Builder?s Dust ? Removing It