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Getting a Home Refinance or Mortgage Loan in Utah With Bad Credit or Bankruptcy
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By J. Hale

If you have recent credit problems or a past bankruptcy, you may be concerned about how difficult it is going to be to get approved for a home mortgage in Utah. There are thousands of mortgage brokers in Utah and many who promote mortgage loans for people with bad credit or a past bankruptcy.

However, be careful of mortgage brokers who are able to put a home mortgage loan together that seems too good to be true. A few of the red flags to watch out for are:

A Prepayment Penalty - Oftentimes, borrowers will forget to even ask about this clause, but what it is is a penalty for refinancing the mortgage before a set date, usually 2-3 years after the initial mortgage closes. The penalty for refinancing or selling your home is usually at least 6 months of mortgage payments or more. This is a serious thing to consider, for it will pretty much lock you in to those mortgage payments for the determined amount of time.

Adjustable or Variable Rate - With an adjustable rate mortgage, you will get an initial, slightly lower interest rate and payment. However, if rates go up, and they often do, your mortgage payment could skyrocket.

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Avoid an excessively high interest rate - A reasonable or to-be-expected subprime mortgage rate would be somewhere between 1-2 percentage points higher than the set prime rate. If your interest rate is beyond that, you may want to shop around for a better rate.

The key when looking for a good mortgage loan is to shop around and compare multiple offers. There are many people in Utah with poor credit who can still qualify for a low mortgage rate.

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This entry was posted on Friday, November 17th, 2006 at 3:10 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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