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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.
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