Mortgage rates are currently at record all time lows all across the country. This means many homeowners can save money by taking advantage of these low interest rates, and have smaller monthly mortgage payments. Cash out refinancing is another option you will have. This is refinancing a mortgage for more than you owe and pocketing the difference. You can use this money to pay off debts or for home improvements, whatever you want. There are different mortgage lenders depending on your personal financial situation. Choosing which lender is a perfect fit for you though mainly depends on your credit rating.

A prime mortgage lender will be the best choice for people with perfect or near flawless credit history. They will help you secure the lowest available rates with a good credit rating. People with bad credit issues, or someone looking for very flexible mortgage conditions, a sub prime lender is probably your best choice to get a decent mortgage rate.

Advantages of using a prime lender.
Typically, a prime mortgage lender offers the best mortgage rates and the lowest closing costs or fees. They are only of use to people with good credit. You can not have any late payments on your mortgage for the past 2 years. Also, your debts should be 35% or less of your total monthly income. You may still be able to use a prime mortgage lender if you missed some payments but will generally have to pay a percentage or two more than the low advertised rates. This can be offset by having a large down payment, or a lot of equity in your home.

Advantages of using a sub prime lender.
Obtaining an approval from a sub prime lender is a lot easier than a prime mortgage lender. Even bankruptcy or foreclosures that have happened in the not too distant past should not affect your ability to refinance with a sub prime lender. Getting a sub prime mortgage may also allow you to avoid paying private insurance premiums. Most prime mortgage lenders will require insurance if you happen to have less than around 20% equity in your house. Also, with a sub prime lender, you can get a bigger variety of different loans, terms, and conditions.

Choosing the perfect mortgage refinance lender for you.
Although there are two types of lenders, there still will be a big difference in the range of quotes. Request written mortgage refinance quotes from different lenders and shop the best one you get around. Often mortgage lenders will match or beat the offer you brought in to them. Sometimes even a conventional lender will be able to get you a sub prime mortgage, so do not count them out either.

-M Petrone

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