Posted: 1 Jun '20

Questions You Will Need to Know When Meeting with a Bad Credit Lender

Questions You Will Need to Know When Meeting with a Bad Credit Lender

If you, like many other people, are going to meet with a lender that helps people with poor credit, you should be armed with questions. Here is a list of items that you should discuss with your lender should they decide to lend to you. Contact us to learn more.

  1. Types of Loans 

  • Even with poor credit, you should qualify for multiple types of loans. Ask a bad credit lender about the types of loans that you can get. The two main mortgage types are closed and open mortgages. With an open mortgage, you usually do not face penalties for paying the balance early, rates on these mortgages tend to be higher and harder for people with poor credit to obtain. A closed mortgage will have lower rates and will penalize you for paying down your balance early. That said, these loans offer reasonable interest rates and very little to no down payment. 

    2. Credit Score 

  • Even though you have poor credit, your credit score will still matter. Find out what your credit score needs to be to get better rates or better loan offers. A bad credit lender will discuss how to go about improving your credit so that you can get better rates or more loan offers.  

    3. Interest Rate 

  • Ask about interest rates. Find out what type of rates will likely be offered to you and discuss the overall cost of your loan. It is good to have an understanding of how much you will be paying and how paying that off will work. 

    4. Down payment 

  • What type of down payment will you need? Sometimes the amount of your down payment will be directly related to the kind of loan that you end up with.  

    5. How Much Income do I Need? 

  • The amount of income that you make will dictate the size of the house or loan that you can take out. If you want a more substantial loan, you will need to make more money. Talk to your bad credit lender about how much you need and how much you make. 

    6. Closing Costs 

  • Closing costs are going to be in addition to the loan that you take out, and they are expected to be paid upfront. Your bad credit lender will make sure you understand how much your closing costs will be so that you prepared when you finalize the purchase of the house. 

Come Prepared 

Be prepared to find out as much information about what you are getting into as you can. Understanding finances can be hard, but a bad credit lender will help make the most of your financial situation and help get you into a better place with your money. Call us today to meet with an advisor.