How Much Higher Would My Mortgage Interest Rate Be With Bad Credit?

Mortgage interest rates are fluctuating now in the economy and they have started to come down but those people with good credit still fair better than those with poor credit. Mortgage interest rates for someone with good credit can be as low as 3-5% while someone with bad credit can pay anywhere from 15-20% and even higher in some cases.

Mortgage Rates and Lenders

Many lenders are afraid that people with bad credit will default on their loans if they have a history of late payments or not paying off debts. Lenders not only increase the mortgage interest rates they also increase the fees and mortgage payments that the lendee is required to pay. The fees could be anywhere from 1-5% of the loan amount. The only good thing about all of this is that a person with bad credit can finally own their own home which is still the American dream. If by chance the consumer should come across a predatorial lender they can always cancel the contract within 3 days of signing it and they also can receive a refund within 20 days of cancellation.

Improving a Credit Score

The best way to avoid all of this is to improve ones credit before attempting to get a home loan. A consumer should pay bills on time and build their credit back up over a two year period and this will improve their credit rating. This will ensure that they have a better chance of receiving a lower mortgage interest rate on a home loan. Someone interested in getting a first home or want to improve their credit they should research and read everything and learn how to improve their credit situation then acquiring a home loan will not be so strenuous.

Related posts:

1. Why Should I Avoid A Bad Credit Refinance?
2. Should I Improve My Bad Credit Before Refinancing?
3. Can A Bad Credit Mortgage Improve My Credit?
4. Can My Bad Credit Mortgage Rate Change If I Improve My Credit?
5. What Can I Do If I Have Bad Credit?