Subprime Mortgages – Not as Easy as They Used to Be

GuestPoster — Sun, 31 Jan 2010 04:27:22 +0000

Subprime mortgage and subprime mortgage refinance lenders have dwindled away in recent years. There are some left however their strategies have changed over the past few years. In the past subprime rates were fairly reasonable and not much higher than prime rate loans. These were great times for those who sought out mortgages for bad credit. However in 2008 these lenders began to apply a tier structured, risk based pricing model which no longer treats all loans as either prime or subprime.

In a risk based price model one may find that they are eligible for a prime loan however their interest rate is directly affected by which end of the acceptable spectrum their credit score lies. With this in mind you can see how important it is to pay close attention to your credit score and take any steps necessary to be sure it is as high as possible before applying for any type of mortgage.

Repairing your credit takes time. Applying for your reports, going through each one with a fine tooth comb, locating discrepancies and errors, reporting the errors and correcting the discrepancies, then waiting for the changes to be reflected in the report can take months. It is best to get started as soon as possible whether you plan to apply for a mortgage or not.

If you are in a hurry, too busy, or just don’t know where to start you can use Rapid Rescore. Rapid rescore is a service provided by most lenders that allows you to expedite the process of credit repair. To utilize this service though you must be able to produce documents that will corroborate the corrections you wish to make to your credit report.

In conclusion it is clear that the process of getting a bad credit mortgage loan is not what it used to be even three years ago. If you intend to save as much money as possible and make the most of your investment, great care must go into your preparation. The best way to prepare for any type of loan is to look after your credit report.

The FICO Score And Your Bad Credit Mortgage

admin — Mon, 19 Oct 2009 14:45:00 +0000

For those of us who live in the United States there is a number that we should be concerned bout when applying for a mortgage and that is the FICO score. This simple number will determine the interest rate you pay, the credit limit that is set and whether or not you get the loan you need to buy that house you have your eye on.

When your score is low you will be applying for bad credit mortgages and will not be in any position to negotiate a good deal with your lender. If you get a mortgage at all you will just need to accept the terms you are offered.

What Is A Fico Number?

FICO stands for the Fair Isaac Corporation who have been around since the 1950′s and originally handled credit histories for companies and consumers. These days their main function is to collect reports from the credit reporting agencies that collect individual credit information namely: Equifax, Experian, and TransUnion.

FICO analyzes the data collected and uses it to generate a number which aims to give a general idea of a consumers credit worthiness taking into account credit history, debt and credit and basically all the information that all lenders and credit agencies have on your financial past.

The number is used by potential lenders to decide how much a risk you represent to them. Obviously they are in the business of getting the money back from you, so if they think you represent a high risk according to your credit rating they will have to charge you higher interest rates to compensate. That is if they grant you a bad credit mortgage loan at all.

There are several things you can do to improve your credit rating and I will go into them in a future article.

Money Management Guide » mortgage loan

Subprime Mortgages – Not as Easy as They Used to Be

The FICO Score And Your Bad Credit Mortgage

What Is A Fico Number?