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Finding a good lender to help you with
refinancing your home loan can be tricky if you
have bad credit. There are plenty of predatory
lenders out there who would like to take
advantage of you with excessively high interest
rates and fees. The key to finding a good lender
is to know what are reasonable terms and to
compare lending companies.
Look At Your Credit Record
Credit records are not perfect accounts. Before
you apply to refinance your loan, you should
check to see that all your information is
correct. If you believe there is a false record,
resolve it with the credit reporting
company.
You also want to know what your credit score is.
The lower the score the higher rate you will
have to pay, but at least you will have an idea
of what to expect from a lender. Paying three to
five additional points is common for people with
bad credit history.
Compare Lenders
Lenders offer different rates for the same type
of loan, so shop around. The easiest way to
compare quotes is to use an online website. By
entering your information online, companies
compete for your loan, offering you better
rates. The internet also allows you to compare
mortgage lenders outside your local area,
possibly finding a better deal.
Once you receive offers, compare the rates and
fees. Often the fees are where lenders make
their money. Adding up the interest and fees,
and comparing that figure will give you the true
cost of the loan.
Look For A Good Deal
Mortgage lenders increase their profits by
pushing loans with high interest rates and
points. Some lenders will push these types of
loans even if they aren't best for you, so
beware of fast-talking dealers. Be sure to read
the terms and look for hidden fees before you
sign the paperwork.
Online mortgage companies eliminate some of this
risk by requiring mortgage lenders to state
their terms online. Online quotes are also more
competitive since lenders know you are probably
shopping around to refinance your loan. Once you
have an offer, print out the terms for your
records.
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