Options For People Seeking A Home Loan With Bad Credit
Home Loan Options for Buyers with Bad Credit
If you havent attempted to obtain a mortgage, say since the 1990s you may be surprised to find that the standards for lending have undergone a significant change. Where it was once virtually impossible to get a home loan if your credit wasnt spotless, it is now a distinct possibility. These bad credit or sub prime home loans come at a stiff price to the borrower though and may, in some cases, not be worth the eventual price that will be paid.
A bad credit home loan will require a larger down payment and will charge a much higher interest rate. What this means to the borrower is that over the life of the loan they may purchase the home several times over, paying as much as triple what a prime loan candidate would. At the moment the average interest rate is 6% for a 30 year fixed rate home loan. For bad credit the rates would be in the area of 10% with the same terms. A $100,000 dollar loan at 6% interest and 100% financing would ultimately cost the borrower a little over $215,000. The same loan at 10% interest would cost an additional $100,000, in other words,...
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