Less than Perfect Credit Mortgage Loan Details

     Commonly called non-conforming (or sub-prime) loans, these are loans where the credit of the individual Mortgagors in considered inadequate by the standards of Fannie Mae or Freddie Mac, like a jumbo these loans cannot be packaged and securitized and resold in the secondary market with the assistance of Fannie Mae or Freddie Mac. Unlike jumbos, the secondary market made by money center banks in the trade for imperfect credit mortgages is small, with many loans purchased directly at origination by non-bank financial firms that seek to hold the loans themselves to realize a profit. Imperfect credit mortgages generally refer to a situation where the mortgage is sound not because of the creditworthiness of the individual, but rather only because of the security of the loan.

Do not make assumptions. If you are unsure about anything...
ASK YOUR MORTGAGE COMPANY QUESTIONS!

1. Inquire about all fees and costs associated with this loan, including the mortgage interest rate and APR (annual percentage rate).

As with any residential mortgage loan....

2. Do not assume that the mortgage interest of this loan will be tax deductible. Consult a qualified tax advisor for potential tax benefits.
3. Be sure to ask if there is a pre-payment penalty (prohibited by law in certain states) for paying off the loan too early or making substantially large payments against the principal.