Sub-prime mortgages are loans to property buyers who's credit rating is generally below 650 or C or below if a letter rating system is used. Sub-prime loans can become more risky to both borrowers and lenders if they are coupled with a type of loan that will reset to a higher monthly mortgage payment in the future. Sub-prime mortgages can be obtained both at banks and online via online mortgage loan providers.
To obtain a sub-prime mortgage online, one should have a credit rating disqualifying them for an alt-a or prime mortgage, both of which are subject to higher credit score requirements. Sub-prime mortgage lenders can be found on the internet and assist individuals with sub-par credit scores obtain mortgage loans if said applicants pre-qualify. Sub-prime mortgages may include either higher interest fixed loans, interest only mortgages or adjustable rate mortgages.
Benefits of online sub-prime mortgage loans
The benefits of sub-prime mortgages are they allow home-buyers with weak credit an opportunity to build credit where that chance may otherwise have not existed. Sub prime mortgages may also have affordable payments if the mortgage loan amount is small enough and if the interest rate is low enough at the time of acquisition i.e. if the prime rate is low at the time of the loan, this is likely to have a favorable affect on the mortgage rate. Sub-prime mortgages also offer the opportunity of home ownership to individuals who might otherwise not have that chance.
Advantages of online sub-prime mortgage loans
There are several advantages to online sub-prime mortgages. Specifically, the mortgages are easier to attain with bad credit than prime loans. Also, in the case of an online sub-prime mortgage broker, several financial institutions may be searched and compared for lending rates and offers. If the loans are adjustable rate mortgage with short term fixed rates, they may be advantageous if the borrower plans on selling the associated property within that time period.
Disadvantages of online sub-prime mortgage loans
Disadvantages may be realized if the prime rate rises to high or rapidly causing adjustable rates to rise or if the mortgage borrower passes the fixed period of an adjustable rate loan.
Furthermore, interest only sub-prime loans may incur excessively high payments if the mortgage amount is very high since a percentage amount increase in cost is multiplied the size of the loan.
Sub-prime mortgage loans are considered a high lending risk within the banking industry and consequently charge higher interest rates to adjust for that risk. Sub-prime mortgage loan applications can be applied for online using web search engines and financial institutions with online banking facilities.
Within the sub-prime lending market are also varying types of loans such as adjustable rate mortgages, fixed interest rates and interest only loans. Additionally, fees and costs associated with the mortgage may differ between online financial institutions making comparison shopping and research a useful in obtaining the best possible after origination cost.
:.
0 comments:
Post a Comment