Title:
Getting the Best
Mortgage Rates in Florida with a Poor Credit History
Word Count:
570
Summary:
Florida is a
lovely place to have a house in; unfortunately the real estate prices are
rather forbidding for most. And for someone with a bad credit past, it gets
tougher.
Keywords:
mortgage
quote,loans,refinance,home loan
Article Body:
Florida is a
lovely place to have a house in; unfortunately the real estate prices are
rather forbidding for most. And for someone with a bad credit past, it gets
tougher. However, if Florida real estate has is in your dreams, you can still
get a mortgage loan, even with a bad credit if you know how to look for
it.
Before we get into shopping for the best mortgage rates, let us understand how
the credit score of a borrower determines the scope of his search. Most lenders
will willingly lend to a person with ‘A’ credit score but someone with a ‘C’ or
a ‘D’ grade won’t get so lucky.
Fortunately, recent entries into the Florida lending industry have led the
industry into being more liberal when approving loans. For instance, if there
are more than 4 late mortgage payments in a period of 12 months, it calls for a
B score, however if these delays have a plausible explanation the lender may
excuse the default and consider a score of A.
There are companies who specialize in giving loans to high-risk borrowers and
they are known as Sub-Prime lenders. Even though loans from the Sub-Prime
source continue to dominate the high-risk borrowers segment, the government-sponsored
agency, Fannie Mae too is beginning to acknowledge the potential in this
category. With the availability of more options, a borrower with bad credit can
afford to get choosy and not jump at the first approval he gets for the fear of
not getting another chance.
The Internet is a good place to look for multiple mortgage options and even for
specifically Florida Mortgage Loans, without the borrower having to reveal his
credit status. One may even go to a mortgage broker in order to locate the best
quotes, but they can be expensive. Ask for reference from friends and
colleagues for a good mortgage lender, since a recommendation is always
assuring.
Once you narrow down your choice, here is a checklist that you must go
through.
1. First analyze your financial status,
if you find you have come out of your past credit blues and can commit more you
can consider an Adjustable Rate Mortgage (ARM). An ARM allows for a lower rate
of interest in the initial years with an option to refinance at a lower, fixed rate
after the first couple of years. However, if you find yourself financially
burdened, a fixed rate payment would be more appropriate. Search, negotiate and
settle for a rate of interest and for terms and conditions that suit your
financial status.
2. Find out how much penalties are
imposed for pre-payment. Heavy penalties will take away the advantage of any
timely payments that you may be able to make and that may get you a refinance
on better terms in the next few months.
3. Most Sub-Prime lenders exploit the
vulnerability of high-risk borrowers and slap on high closing costs at the end
of the loan. There are more lenders out there willing to do business than one
would have you believe and a little negotiation can always add to some cost
shaving.
4. Avoid paying any upfront or
processing fees; the only fee acceptable should the one you pay for your credit
application.
5. Ensure that everything goes on paper
in writing, from the rate of interest, to the closing costs to the pre-payment
penalties and that nothing comes as a surprise after you have signed the
contract.