Sub Prime Mortgage Loans Five Ways To Lower Your Rates On A Sub Prime Mortgage

Sub-Prime Mortgage Loans - Five Ways to​ Lower Your Rates on​ a​ Sub-Prime Mortgage
Sub-prime mortgages don’t mean you​ have to​ pay excessively high interest rates to​ buy a​ home .​
By taking time to​ do some research and pick the​ right terms,​ you​ can save thousands on​ your mortgage .​
The following five tips will help you​ get low rates with the​ right subprime lender.
Compare Lenders
The number one way to​ lower your interest rates on​ your sub-prime mortgage is​ to​ compare lenders before you​ apply .​
It sounds so simple,​ but too many homebuyers skip this step,​ costing them thousands.
Plan on​ taking at​ least a​ day to​ explore your options .​
The easiest way to​ look at​ financing packages is​ to​ request quotes online .​
While you​ are requesting quotes,​ take a​ look at​ conventional lenders as​ well .​
They often offer good rates and terms for those with adverse credit histories.
Pick An ARM
Adjustable rate mortgages (ARM) offer lower rates and are easier to​ qualify for than fixed rate mortgages .​
The drawback is​ that ARM rates can increase over the​ years .​
But if​ you​ are planning to​ move soon or​ just want to​ buy a​ home,​ then an​ ARM probably is​ your best choice.
You can also convert your ARM when your credit score improves .​
As property prices increase and your equity builds,​ you​ will also be able to​ get better terms in​ the​ future.
Increase Your Down Payment
By increasing your down payment,​ you​ can knock off up to​ a​ percentage point .​
Zero or​ little down financing is​ great for those short on​ cash,​ but rates are significantly higher .​
Ideally,​ you​ want to​ put down 25% to​ get the​ best rates .​
Just leave enough cash reserves to​ financing moving expenses.
Pay a​ Point Or Two
Points paid upfront can also lower your interest rate .​
You want to​ be sure though that you​ recoup the​ upfront costs .​
If you​ plan to​ move or​ refinance in​ a​ couple of​ years,​ you​ will not see the​ savings of​ lower rates.
You may also find that your money would be better spent on​ increasing your down payment than on​ paying points .​
With this type of​ decision,​ you​ will want to​ do some math with a​ mortgage calculator.
Bulk Up Cash Reserves
By increasing your cash reserves,​ you​ can also improve your credit score to​ qualify you​ for lower rates .​
Take advantage of​ tax refunds or​ cash bonuses by putting them into your savings .​
Lenders look at​ saving accounts,​ money markets,​ and CDs as​ cash reserves,​ not stocks or​ other volatile assets.
Sub Prime Mortgage Loans Five Ways To Lower Your Rates On A Sub Prime Mortgage Sub Prime Mortgage Loans Five Ways To Lower Your Rates On A Sub Prime
Mortgage Reviewed by Henda Yesti on June 27, 2018 Rating: 5

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