When you have bad credit, lower income, or no credit history and youre applying for a mortgage, you need to read the fine print; the truth and lending section first of all. You need to question how the variable interest loan will apply to you exactly. How much will your monthly payment be? how much will go to the interest? for how long? how much will go to the principal? for how long? is my payment going to increase after a certain time?



Unfortunately, its very hard to get a fixed rate with lower income, bad credit or no credit history. This is when the lending institutions take advantage. If they are offering a special 1% APR for 5 years or something that sounds to good to be true, thats because it is. This is probably just to carry the loan. The American public doesnt have protection against these lending institutions that lack morals.





Mass foreclosures began when lenders and banks and other financial institutions started selling sub prime mortgage loans, which means they were selling loans to lower income people who had bad credit, or no credit history, which means a low credit score.



These people didnt have the credit rating to qualify for a Fixed APR loan. In other words, they wouldnt explain this to people, and people just trusted the institutions. They would succeed in having the applicant sign for the loan by using low payment or no payment offer of 1% APR for five years.



This 1% APR that they were going to pay for five year, would not count towards principle or interest. In fact, the debt would grow, the interest would compound daily. Also, the contracts would stipulate that the lenders could change the terms and conditions of those five years to their own convenience, not the borrowers.



Many of the lending institutions would wait six months and then start billing clients at the highest variable interest loan. Of course by then the debt had grown six more months of interest. which made their monthly payment much higher, sometimes double. This made it virtually impossible to keep up the mortgage payment, thus, leading to foreclosure for many.



This has been one of the most devastating disasters to be put upon the American consumer. Hundreds of thousands of people lost their homes to foreclosure. This has lead to the drop in property values and the bankruptcy of many lending institutions.



If you are ever in the market for a home and dont have the best credit, your need to ask questions. The best thing to do is try and raise your credit score buy taking care of collection bureau issues. Call up your creditors and make arrangements, or you can make a pay off deal with them and your credit score will increase. This will definitely give you a better chance for a better mortgage offer. A Fixed APR loan is your best option.



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I always add this to all of my pages; please dont forget to spay or neuter your pets to help keep the pet population down. Have a wonderful day!