A subprime mortgage is typically granted to an individual who has a poor credit history that’s often below 600, and one of the bad parts of this type of mortgage loan is that the lender typically charges an interest rate that high above the nations prime lending rate the day.
Adjustable Rate Mortgages
Orange County residents will be all too familiar with adjustable rate mortgages or (ARM) mortgages as they are also known.
Adjustable rate mortgages look great in the very beginning but since this type of mortgage loan is based on a “floating rate” the borrowers mortgage payment will go up as the interest rate changes.
The sad thing about ARM mortgage is that the borrower many times will end up paying a much higher interest rate for their mortgage loan and they will eventually be unable to make their mortgage payments because, they were not prepared for their interest rate to increase.
Are ARM Mortgages Still Available?
Although adjustable rate mortgages are still available, many lenders across the United States are more cautious of whom they lend money to compare to the years 2004-2006 when lenders had more liberal lending standards, when it seemed like almost anyone could get a mortgage loan especially if they didn’t have a job or income verification.
If you’re thinking about buying an Orange County home and are considering an adjustable rate mortgage, there are other mortgage loan options that you may qualify for like FHA and HUD mortgage loans.
To save yourself time and money when it comes to your mortgage loan, contact Sun Financial group today for a free, no-hassle mortgage consultation by calling (949) 699-1950