Jun 28 2007
The sub-prime mortgage worry and remedy
Most of the Florida mortgage originations our office processes are conventional type programs; that is, FNMA (Fannie Mae) or FHLMC (Freddie Mac), the government sponsored agencies that buy loans on the secondary market. New home buyers with questionable credit histories, I beleive, should seriously consider repairing their credit prior to shopping for a home.
The alternative in focusing on your credit profile first; is obtaining a less desirable mortgage from a sub-prime lender. These usually are presented with the same basic ingredients; low start rates that are fixed for only 3 or 5 years; prepayment penalties for 3 or 5 years; and high fixed Margins so that when the loan adjusts, the new interest rate is very high.
Buying a home, especially your first, is a major decision in life. Always seek the best terms available that fit your specific needs by contacting a mortgage professional. And if your credit history is less than perfect; please take the time to investigate and repair your credit. You will be happy you did and so will your wallet since you will be able to pay a lower interest rate on your home mortgage.