Factors to consider before applying for a bad credit mortgage in Maple

Factors to consider before applying for a bad credit mortgage in Maple

A common misconception among borrowers with a bad credit history is that they will not be eligible for any type of mortgage loan. You may have a bad credit history due to any number of reasons, ranging from long outstanding debts, pending court proceedings, insolvency, etc. but if you feel that you have been shunned away from the mortgage market for ever, you couldn't be farther away from the truth.

The fact is that there are many mortgage lenders in Maple who specialize in providing mortgages to people with bad credit history. These mortgages, called bad credit mortgages, are similar to normal mortgages except that they may come at a higher interest rate or costs. This higher rate is, naturally, the premium the lender charges for assuming a high risk borrower.

While selecting a bad credit mortgage company, compare the APR offered rather than the interest rate. APR, i.e., Annual Percentage Rate reflects the actual cost of loan, including rate of interest and other fees and charges.

A smart way to get the best bad credit mortgage rate in Maple would be to work towards improving your credit score, after which you can get a mortgage loan at a low rate of interest. A substantial amount of down payment made at the time of taking bad credit mortgage will also help you in getting a lower mortgage rate in Maple.

Watch out for prepayment penalty. Prepayment penalty is basically a penalty applied when the borrower repays the loan earlier than its original term. This is because if a person repays all the outstanding amount of his 20-year mortgage loan in the 6thyear itself, the lender will lose out on the interest for the remaining 14 years. Thus, prepayment penalty is charged to recover the loss made due to early payment by the borrower. It is generally expressed in terms of percentage of loan account. Look for a mortgage company in Maple that does not charge you prepayment penalty. This way, you can take another mortgage with lower interest rate to pay off the bad credit mortgage and save on its high interest payment.

Do not commit the mistake of jumping into the first mortgage bandwagon that comes your way. There are plenty of reputable mortgage loan companies in Maple that offer sub prime mortgages or bad credit mortgages. While the interest rate they charge is no doubt important, remember to pay special attention to other costs like closing costs, processing fees etc. You must read in between the lines to discover any hidden costs.

For more information, you may contact:

Allegro Mortgages Corp. Best Broker for All Your Financing Requirements

(416) 987-0008

Check out amortgages.ca for more information ondifferent refinancing options.

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