If a homeowner has bad or less than desirable credit, a subprime mortgage refinance may be their only option. Getting a mortgage refinancing through a traditional lender does not give a homeowner with bad credit the amount of choices, or savings, a subprime mortgage lender will. However, there are some things which you should be aware of prior to getting a refinance from a subprime lender.

Especially in the past few years, subprime mortgage lenders have been growing and expanding as more homeowners are facing financial, credit, or mortgage problems. These problems make many homeowners ineligible for a traditional refinancing and forces them to use the services of a subprime mortgage lender. Just like anything else though, not every subprime lender is the same. The smart homeowner will shop around different lenders and their options, rates, and terms before signing any refinancing agreement. So, here are 2 tips which will help homeowners who need a subprime mortgage refinancing:

Mortgage Interest Rates will be different
Homeowners with a credit rating which is not so good will almost always pay higher than average mortgage interest rates, That does not mean that getting a rate which is beneficial to you is out of the question. When doing the research and comparing lenders, you will quickly see that rates, terms, fees, and conditions are very different from lender to lender. Prior to accepting any refinancing agreement, make sure you are truly getting the best deal and do some research.

Watch Out for Costly Fees, Terms, and Conditions
Often, a subprime mortgage lender will attempt to add on fees and conditions, such as prepayment penalties. This prepayment penalty condition means that if you pay off your refinancing or mortgage within a set amount of time, you will need to pay a penalty. Always be sure that you are aware of these penalties if your plan is to refinance later to try to save even more money.

Lying about Income is Very Bad
Sometimes, a shady subprime mortgage refinancing will have you lying, or inflating your income on the application. This is always a bad idea, and will be found out. It also shows the potential mortgage lenders and banks that you are unable to pay for your home, and will most likely deny your application. If you are ever asked to lye, pad, or inflate your income, find a new lender.

Subprime mortgage refinancing should be easier with these tips. Homeowners should always try to get as much information prior to refinancing as possible. This is the only sure way to know you are getting the absolute best deal possible. Bad credit mortgage refinance is not impossible, and is usually easier than you think it is. Take action now, and see the savings next month.

-M Petrone

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