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Choosing Between Bad Credit Mortgages
When considering your options for bad credit mortgages, look out for the following three pitfalls that can sneak up on you:
Fees and Penalties – Sub prime loans can not only cost more to process, they can also incorporate higher late fees and payment penalties of which you should be aware.
Prepayment – Some bad credit mortgage companies need you to stick with their program to ensure they make their allotted profit - and this can mean prepayment penalties (a fine for paying off the mortgage too quickly). This can mean a huge loss if you refinance too soon, so watch out for length and amount of prepayment penalties.
Rewards – Some mortgage companies and banks will reward you for improved money management. For instance, if you make a number of payments on time, your interest rate may be reduced. These kinds of incentive rewards are great for folks determined to turn over a new and better credit leaf.
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