|
|
|
Sub-prime loans have higher fees and interest rates than conventional loans because of the potential risk to the lender. However, these fees may make sense for those individuals who can find no other way to finance a new home. However, Freddie Mac estimates that 15 percent of sub-prime borrowers actually have high enough credit score to qualify for conventional loans. Be sure to check with conventional lenders before you get bad credit loans. If you are looking at refinancing or consolidating debt by utilizing your home equity, but have dismal credit scores as a result of bankruptcy, divorce or other financial setbacks, sub-prime loans can be an option. Kathleen Schreck, a mortgage banker and chair of the Massachusetts Mortgage Bankers Association notes, There are people who do get into financial trouble and sub-prime loans help them obtain a mortgage to get out of them. These loans give consumers the ability refinance or cash out their home equity and get back on their feet. In the worst case scenario, when it is impossible to even qualify for a sub-prime loan, hard money loans may be a last resort. These loans are made by private investors that are willing to finance riskier loans, but they come at a much higher price. The interest rates and fees can be extremely high, but hard money loans may be the only possibility in financing expensive properties or refinancing expensive properties. They are also an option in the eleventh hour of a foreclosure. There are times when a sub-prime loan or a hard money loan makes sense, however these loans are also more likely to foreclose on properties. Be sure that you have examined all possibilities and use unconventional loans wisely. |
加入最爱