Refinance Mortgage Lenders - Prime Lenders Vs Sub Prime Lenders

 Refinancing your mortgage can save you money through lower interest rates and smaller monthly payments. You can also choose to cash out all or part of your equity to pay off bills or to remodel your home. But which lender is best for you really depends on your credit.

For those with near perfect credit, a prime lender is your best choice for finding a low rate. But for those with some credit problems or who want flexible loan terms, then check out a sub prime lender for competitive financing.

Benefits Of Prime Lenders

Prime lenders usually offer the lowest rates with the lowest fees, but only to those with excellent credit. That means no late payments on mortgages or other loans in the last 24 months. You should also have a debt ration of 36 or less, meaning your monthly debt payments should equal 36% or less of your monthly income.

With a few late payments, you may still get approved with a prime lender. But your rates will probably be a percent or more over the conventional rate. You may offset this with a large equity base or large cash assets.

Benefits Of Sub Prime Lenders

Getting approved with a sub prime lender is much easier than with a prime lender. Even if you have had a bankruptcy or foreclosure in the last few months, you can get a refi mortgage.

You can also avoid the cost of private mortgage insurance premiums with a sub prime mortgage. Prime lenders require insurance if you have less than 20% of equity in your home. Sub prime lenders also offer a wider variety of terms and loan options.

Finding The Best Refinance Mortgage For You

Even within each category of lender, there is a great range of rates. In order to find the lowest costing refinance package, you really need to request mortgage quotes from several lenders before making a decision.

There is also the trend for financial companies to deal with both types of lending. So don't rule out conventional lenders if you are looking for a sub prime mortgage.

About the author:

View our recommended Bad Credit Mortgage Refinance lenders or view all of our Recommended Refinance Lenders.

 Carrie Reeder

More Articles 

100 Percent Refinance – No Down Payment Refi Loans - Carrie Reeder
Refinancing 100 percent of your loan allows you to cash out all of the value of your home. With no down payment required, you can use your money to pay off debt, invest in other property, or remodel your current home. When refinancing, make sure...

Should you refinance? - Michael VanDeMar
There are several reasons that might make someone consider refinancing their existing mortgage. One would be to get a lower interest rate than what they currently have, thereby reducing monthly payments and lowering the overall cost of the mortgage....

Giving Finances a Breather Through Loans for Unemployed - Andrew Baker
Martin graduated of the college with dreams of a highflying career. However, the subsequent unemployment put a check on his dreams. It has now become a matter of making the ends meet because of the various debts mounting up on his account and the...

Auto Refinance - Tony
You have probably heard of auto refinance before. Or simply refinance. The term "refinance" actually refers to a financial situation wherein a borrower finds financing to pay off a current loan. Refinance is often put into practice in...

How to use freight bill factoring to finance your trucking company - Invoice Factoring Group
There are few businesses that are as cash flow intensive as a trucking company. The list of ongoing expenses can be endless and can easily overwhelm small and medium size trucking companies. There are fuel expenses, truck repairs, rentals...

How to finance a new extension? - John Mussi
Want to improve the look of your property? Want to add value to your property? The extension plans are ready but the finances are not. Rather than waiting another year why not consider a Home Improvement Loan. Make the dream become reality with a UK...

Should You Consider Home Refinance, or Not? - Jay Moncliff
Home refinance seems to be the craze these days with interest rates at all time lows. However, you need to do some home refinance research before you will know if it is for you or not. In general, if you bought a home when interest rates were...

How to Finance Your Car with a Bad Credit Rating - Talbert Williams
Financing your car nowadays is not very difficult, even if you do have a bad credit rating. Bad credit car loans and home equity loans can help you in financing your car with bad credit. You can even get the loans at reasonable rate of...

Don’t Want To Refinance Your Current Mortgage But Need Some Cash? Consider A Home Equity Line Of Credit! - John R Blakefield
A home equity line of credit is becoming a more popular option among home owners who don't want to refinance or take out a second mortgage. A home equity line of credit is like a second mortgage, in that you use your property as collateral for the...

Car Finance Company Basics - Carrie Reeder
Purchasing a new vehicle requires more than just deciding what type of car to buy and how much to pay. Unless you have a lot of cash saved and can buy the car upfront, you will have to decide upon some type of financing. Before choosing a...

How to Refinance Your Home - Tony
Refinance Your Home - There are several reasons why you should consider a refinance mortgage on your home loan. When you refinance your home, you can cut your monthly mortgage payments. In addition, you can tap into your equity, or your...

Will You Qualify for that New Mortgage or Re-Finance? - TrimYourDebt com
The Federal Reserve continues to raise short-term interest rates, but long-term mortgage rates are still at 40-year lows. This may be one of your last opportunities to lock in great interest rates below 6%. So, we put together a brief checklist for...