Protect Yourself from Bad Credit Mortgages

2007-03-08 10:33:40

( Financial )



Protect yourself and your family from losing your homes through bad credit mortgages. The bad credit lender usually targets people in lower-income groups and the elderly who are already suffering from financial crisis. Bad credit mortgages are marketed as the ‘mortgage for people with bad credit’ or as ‘bargain loans’ via mail, e-mails, phone calls and sales visits. These bad credit lenders are only friendly and nice for a short time. But be warned that these people will charge you high fees that will only lead to more debt. Aside from being subjected to aggressive sales tactics, you will also experience harassment during collection of payments.

These bad credit mortgages can be avoided if you are in the lookout for the following signs and share this information with your family members:

The bad credit lender will give you a loan based on the equity in your home and not on your ability to repay based on your income.Loan terms of bad credit mortgages are also changed from the time you apply to the time you sign. Do not sign a loan if the terms are not what you were given when you applied.

Bad credit mortgages usually involve large single payments at the end of contract. Even if you made all the other payments but if you can't make this last balloon payment, you will still loose your home.

Bad credit lenders will repeatedly ask you to refinance the loan which will lead to additional charges and interest points that will only bring you further into debt.

Also remember to think of the total cost and do not let a bad credit lender brainwash you with reduced monthly credit payments which are very costly in the long-term.

Instead of putting yourself at risk for bad credit mortgages seek the advice of a financial counselor or lawyer before making any loan decisions.


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