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4 Questions to Ask About a Bad Credit Mortgage Company
By Francine L. HuffMortgage Credit Problems Columnist
It's not impossible
to get a mortgage if a person has bad credit. But it may take a little more
work to find a reputable lender willing to work with someone who has bad credit.
Here's what people should ask about bad credit mortgage firms before signing
any contracts.
- What's the Company's Track Record?
No matter how people with bad credit may be to get a mortgage, they should always be diligent about checking out the reputation of any lender they're thinking of doing business with. Homebuyers should find out how long the company has been in business and if they've done a lot of lending in their area. They can check with their local chamber of commerce or other business associations to find out if anyone is familiar with a particular mortgage company or loan officer.
- Have There Been Complaints?
Unfortunately, there is potential for fraud when getting a mortgage with bad credit. That's why it's important for people to check with the Better Business Bureau or state attorney general's office to make sure there haven't been any complaints filed against a mortgage company they're considering. They should also find out if a lender is registered with the state licensing board, which will also know about any complaints.
- Does the Company Make Unrealistic
Promises?
It's a tough housing market so naturally people will face more scrutiny when getting a mortgage with bad credit. So red flags should go up if any lender makes unrealistic promises about obtaining a home loan. Even people with good credit are jumping through hoops to get approved for a mortgage these days. Signs that a bad credit mortgage company may not be on the up-and-up are if they claim you won't need a down payment, require you to work with their own appraiser, or keep changing the terms of their offer.
- What Fees Are Involved?
It's important to get a Good Faith Estimate of all the fees that will be involved with obtaining a mortgage. Among other things this document will show the interest rate and points, as well as loan origination, appraisal, credit report, recording, and title insurance fees. But even information in that document may change before closing.
Checking out a bad credit mortgage company will take time
and effort. But in the long run it will be worth it to know that obtaining a
loan with a particular lender won't result in problems later on.
Source
U.S.
Department of Housing and Urban Development
About the Author
Francine L. Huff is a
freelance journalist and the author of The
25-Day Money Makeover for Women. She
has appeared on a variety of TV and radio shows.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
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