Buying a Home After Bankruptcy - Beware of Shady Subprime Mortgage Lenders

If you have got a recent bankruptcy and are looking to purchase a home, be careful of unethical or predatory lenders. Whether you are looking online or offline for a mortgage lender, it is becoming increasingly more than common that subprime lenders are taking advantage of bad credit borrowers.

Many lenders will take advantage of borrowers with recent bankruptcies and bad credit because they cognize that the borrowers loan options are limited. Sometimes these lenders will charge excessively high fees, extended pre-payment punishments on the home or inquire for a fee upfront to "process" the loan.

Here are some tips on applying for a mortgage loan after a bankruptcy:

Beware of the Lender Request For a Fee Upfront - Anytime you are applying for a mortgage loan, the lone fee you should ever have got to pay is the application fee which covers the cost of the lender pulling your credit application. Some lending cozenages affect asking for a processing fee of 100s to thousands to procedure the loan.

Compare Loan Offers - If you can compare from 3-4 mortgage application quotes then you will cognize what to anticipate the current interest rate for subprime mortgage loans to be. If you accept the first mortgage loan offer you have, you may be paying a much higher interest rate than what is sensible for your credit history.

Get Shutting Costs in Writing - Brokers cognize that if a borrower have bad credit, they are most likely departure to be more than concerned about getting a sensible interest rate and just getting approved than making certain they get normal shutting costs. This is where many lenders will ding the borrower with credit problems. They will sometimes charge excessive shutting cost fees. Get the listing of shutting costs in authorship ahead of clip and then do research online to make certain that the costs are reasonable. If the costs are not, travel back to the lender and state them that the shutting costs are too high and you will not travel through with the loan until they are lowered to be what is normal. The broker will usually comply, because they don't desire the loan to fall through.