| Buying a home with bad credit enables you to | | | | You also have the option of buying down rates |
| start rebuilding your credit score. You can also | | | | by paying points at closing. This is a good deal if |
| enjoy the thought of growing your equity, a | | | | you don't plan on refinancing or moving in the |
| valuable investment. Besides these common | | | | next seven years. A refinancing option can also |
| benefits of homeownership, with a subprime | | | | be part of your loan terms. |
| mortgage you can also avoid PMI, have flexible | | | | Bad Credit Loans are Easier To Qualify For |
| terms, and qualify easily. | | | | Subprime mortgages are easier to qualify for than |
| No PMI Premiums | | | | conventional loans. Bad credit isn't a hindrance. |
| Private mortgage insurance (PMI) is required for | | | | Neither is a high debt to income ratio or small |
| conventional loans when less than 20% is put | | | | cash reserves. |
| down. Subprime lenders don't have this | | | | Adjustable rate and interest only loans can help |
| requirement, so you can save hundreds a year on | | | | you qualify for more. The trade off is the |
| this common mortgage cost. | | | | security of a fixed rate. However, ARMs can |
| Without a PMI requirement, you can easily get | | | | have caps in place to protect you from rapidly |
| into your new home with zero down. You will | | | | rising payments and interest rates. |
| have slightly higher rates. But, you should also | | | | However, you can expect to pay slightly higher |
| realize that if you refinance for conventional | | | | rates with such lenders. The reason is that the |
| terms, you will have to have PMI if your equity is | | | | risk level is higher with such loans. Depending on |
| less than 20% | | | | your credit situation, rates will be 2% or higher. |
| Bad Credit Loans Have More Flexible Terms | | | | Comparison shopping will help you find the most |
| Subprime lenders also offer more flexible terms | | | | reasonable lender. Also check with traditional |
| for people with poor credit. Besides presenting | | | | lenders, since they are also in the subprime home |
| adjustable or fixed rates, lenders also offer | | | | loan market. With a little bit of time, you can find |
| balloon payments or interest only. You can also | | | | a mortgage that will help you enjoy the benefits |
| borrow more than the conventional loan caps, also | | | | of owning your own home. |
| known as a jumbo loan. | | | | |