CHICAGO SUN-TIMES
AUTHOR: EDIE JEROME, MAY
21, 1999
PAGE 22, SECTION: HOMELIFE
High-risk borrowers have
options
Are you a credit challenged
borrower with no place to go?
Have you recently gone
through a bankruptcy, foreclosure or divorce, and need
to refinance? Have you attempted to refinance, only to
find out three weeks into the application that the loan
cannot be done?
Many banks and mortgage
brokers in Illinois specialize in sub-prime lending,
helping credit challenged borrowers purchase or
refinance a home. Although the task is not easy, with
knowledge and expertise it can be accomplished.
The sub-prime industry was
designed to help the "less than perfect borrower" who
has late payments on his or h er mortgage, credit cards,
rent and various loan obligations. The trick is to make
sure that the broker or banker you use knows the
programs available, and has reliable lenders to choose
from.
Sub-prime lending is
specialized, and programs change frequently. Interest
rates usually are higher, and fees are charged. As a
consumer, you are entitled to full disclosure at the
time of application as to the terms of your loan.
When applying for a
mortgage, make sure you first ask about fees, time frame
and the knowledge of the banker or broker. If you
cannot get adequate answers to these questions, then you
need to inquire further.
When the application is
taken, make sure you read each document, and that you
understand each document you sign. If you do not
understand, ask for an explanation.
Here's what you should ask
your broker or bank:
What type of loan is being
suggested? Is there a pre-payment penalty? Will you
need additional funds for closing? Can you close during
the day, weekend or evenings? What are your rights as a
borrower to cancel the loan?
Listen to your broker or
banker, too. You might get information to use down the
road. For example, the broker or banker can tell you
how to plan for future refinances after a bankruptcy or
foreclosure. He or she can explain how to obtain future
credit, and after a year or two into your loan, how to
refinance into a lower rate.
Edie Jerome is a loan
officer and president of Metro Mortgage Services,
Palatine, IL 847 776 8070.
Chicago Sun-times reprint.
