Lowest Mortgage Rate For Those With Credit Problems

2007-03-08 10:33:40

( Financial )



You may think that no lender would finance your home mortgage if you have some credit problems. It could have been true in the past because back then you had to be a premium buyer (high salary, cash in the bank and sterling credit) to qualify for a mortgage financing.

But times have changed. Most lenders now offer financing to less-qualified buyers albeit at slightly higher interest rates to make up for the added risk. You just need to shop and make loan compare rates. You would be surprised at the positive results. Remember that you will not get the same lowest mortgage rates and the best terms like those offered to premium buyers.

Most home buyers’ consideration is getting the best loan rates. Getting the best mortgage rate is as important as setting the amount of the loan to determine whether you can afford a mortgage. Higher interest rates translate into higher payments; lower rate, lower payments. You would always want the lowest mortgage rates possible.

Conventional mortgages (non-government guaranteed or insured) come in two major forms: variable-rate mortgages, where interest rate changes in step with an index, and fixed-rate mortgage, where interest rate remains constant throughout the life of the loan. To find the lowest mortgage rate applicable for your situation, be sure you compare fixed-rate to fixed-rate and variable to variable.

Variable mortgages always offer lowest mortgage rates. But the variable rate does not always mean the loans best rate as it will rise when the interest rate market goes up. It’s usually better to lock in a fixed-rate mortgage when the interest rate market is low, rather than to try for an extra point or so by getting a variable rate.

Although interest rates affect the affordability of the loan, remember that the best loan is the combination of interest rates, points, and fees.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.