The majority of people underestimate the strength of their credit. The majority of people think that a FICO score in the 500's disqualifies them from getting a good conventional mortgage which leaves them as an easy pray to a subprime lender or a hard money lender.
The reality is that the subprime meltdown is the best thing that could have happened to low FICO score borrowers. Why you ask?
My name is Mehdi Cherkaoui and I operate BrokerPolice.
I can tell you that the fall of subprime lenders put the government in a position to step up through FHA(federal housing administration) and offer most bad credit people a shot at the american dream with great terms and low interest rates. These very same people would have been "abused" by subprime lenders offering ridiculously high rates and fees in addition to adjustable rate mortgages. Greedy lenders and unscrupulous brokers combined committed what I like to call "mortgage rape".
One issue rises in the midst of this blessing. How do you keep mortagge brokers from taking advantage of FHA programs and charging low FICO score borrowers, eager to get a home and still skeptical about their unexpected approval, huge fees and high rates.
The answer is HOMEWORK, HOMEWORK. As a first time home buyer there is a lot of research you need to do and help you need to get. You can also seek the help of a professional mortgage consulting service independent from your broker or lender that can tell you if your getting the right deal. at BrokerPolice.com, we do just that. On a daily basis, Clients send me good faith estimates loaded with unecessary fees and higher interest rate than they actually qualify for. We write an analysis and give them the best second opinion. If you have a friend or a relative who is an expert in mortgages, they can help you as well.
