Subprime Mortgage Low Down Payment And No PMI
Windowofworld.com – Subprime mortgages offer financing for those with bad credit to finance the purchase of a home. Today’s sub-prime mortgages offer a low down payment option without private mortgage insurance (PMI). As a result, more and more people are finding it easier to buy a home.
Subprime Mortgage Options
Sub-prime mortgages come in many flavors like conventional loans. Just like conventional loans, a low down payment or zero down will increase your interest rate. However, you have no PMI premium to pay.
Another option is to buy points to lower your interest rate as well, but this only makes sense if you plan to hold on to your mortgage for seven years or more. A better plan is to increase your credit score, and then refinance in two to three years for a conventional loan.
More and more finance companies are offering sub-prime mortgages. Even Freddie Mac and Fannie Mae offer sub-prime programming. So to find the best rates and terms, you should ask for quotes from conventional and bad credit lenders.
When you’re comparing lenders, take a look at the APR for a quick check. APR includes interest rates, points, and fees. However, you’ll also want to look at the terms, making sure there are no fees for refinancing or initial payments.
To quickly gather this information, take advantage of the internet. Most lenders offer quotes online. You can also request quotes from a mortgage broker, who will provide you with multiple quotes at once. If you find a lender with a competitive offer, you can ask for more information or apply online for quick approval.
A subprime mortgage gives you the opportunity to buy a home while improving your credit history. Instead of wasting your money on rent, you build equity in your home that you can use for last. You can also deduct interest from your taxes.
Regular mortgage payments will also improve your credit history. So not only will your rates increase with other types of credit, but you can also refinance your mortgage in a few years for lower interest payments.