December 11, 2001
By: Bev Dodd
Mortgage loan bad credit: From lenders who know it's not always your fault
It wasn't very long ago you couldn't get a sub prime or mortgage loan bad credit loan but that's all changed. With interest rates so low it might be a good idea to get an adjustable rate mortgage and then lock it in later, if the rates go up on your mortgage loan bad credit.
Just a few years ago it was almost impossible for borrowers to obtain a mortgage loan bad credit, if they did not qualify for either a conventional or government loan. The non-conforming (sub-prime) lending market was developed to assist borrowers who fell into a higher risk category in obtaining a residential mortgage loan. Many borrowers are good people who honestly intended or intend to pay their bills on time. A catastrophic event, loss of employment, transfer in job could all be good reasons for falling behind on scheduled payments. A previously unforgiving bank now has the latitude to take into consideration events outside the borrower's control.
When thinking about a mortgage loan bad credit, an adjustable rate mortgage offers the borrower the option to convert the loan from an adjustable-rate to a fixed-rate at specified times during the term of the mortgage. This option is attractive to many buyers who may wish to take advantage of current low interest rates, but want the security of a fixed-rate loan in the future. Make sure you know in advance of any costs associated with the conversion of the loan.
Remember sub prime or mortgage loan bad credit loans are typically for the short term, approximately 2-4 years. But by then you will have the chance to clean up your credit and now qualify or refinance into a lower risk, lower rate loan
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