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Bad Credit Mortgages in Arizona

There are certain things you need to know before buying a home in Arizona. First, the median price of a home in Arizona is $120,000. Recently, homes in Arizona have been appreciating at rates more than double the national average. As a result, income levels in many parts of Arizona are too low to purchase a median-priced home with a conventional loan. For this reason, it’s important that Arizona homebuyers with bad credit and bankruptcies know what to look for in a mortgage company. This article offers advice on what to watch out for when choosing a bad credit or after bankruptcy home loan lender in Arizona:

Lender Charges Excessive Prepayment Penalties
Reputable lenders will rarely charge prepayment penalties, and, if they do, the charges are reasonable. Predatory mortgage lenders charge excessive prepayment penalties in order to discourage your from refinancing.

Mortgage Contract Contains a Mandatory Arbitration Clause
If you sign a mandatory arbitration clause, you forfeit all of you rights to take legal action of your lender. This means, if you later discover that you’ve entered into a mortgage with a predatory lender, you will not be able to take legal action to get out of the loan.

Your Interest Rates Are Higher Than Expected
Many predatory lenders will place borrowers into sub-prime mortgages even when they could qualify for a regular mortgage through another lender. Sub-prime mortgages have higher interest rates and considerably poorer terms than regular mortgages.

To avoid predatory lenders, borrowers should check their mortgage company’s name with the Better Business Bureau and Consumer Reports. Additionally, borrowers should always compare rates among mortgage companies before signing any loan contract. If you are hesitant about signing a contract, hire a lawyer to go over it with you. Lawyer charges will be significantly cheaper than entering into a mortgage with a predatory lender.