bad credit lender

bad credit home lender

Choosing a Bad Credit Lender
Executive Summary about bad credit lender by Darin Sewell

When shopping for a home mortgage most borrowers with adverse credit have no choice but to use a bad credit lender for their home loan. Almost all of the mortgages for bad credit borrowers are originated though mortgage brokers and funded by sub prime lenders. Most local banks and large lenders like Countrywide and Wells Fargo do not offer sub prime mortgage loans any longer.

So stay with the sub prime mortgage company that gets you the best deal.

Secondly you may want to choose a mortgage company that primarily deals in sub prime mortgages. Additionally many mortgage companies who deal only in bad credit mortgages will generally have researched out the best lenders for their borrowers and not just use the biggest most common lenders every other mortgage company does. This can benefit the borrower through lower interest rates, better loan programs and reduced closing costs.

Bad Credit Lender Tricks and Sneaky Fees
Executive Summary about bad credit lender by Darin Sewell  Leslie Collins

Certain broker banks and bad credit lenders are not subject to the disclosure laws of the RESPA (Real Estate Settlement and Procedure Act).

However the broker that that you are working with and who also works with the bad credit lender offers you the loan at 7%. When a broker marks up a rate like this it’s called Yield Spread Premium’.

The broker gets a nice bonus from the lender when he increases your interest rate above what you actually qualify for.

For each .25% of a point he increases your interest rate he gets an EXTRA cash bonus of 1% of the original loan amount.

So if you are borrowing $250,000 and are charged an extra .5% (7% instead of 6.5%) the broker just pocketed an extra $ 5,000 by using the yield spread premium tactic.

Check out other guide on loan.