Why is there a prepayment penalty? Most loans are sold on the secondary market. Investors need assurance that they retain their margins for lending their money.

Why should I take an adjustable rate if my credit scores are sub-prime? There is no reason to lock yourself into a high fixed rate for an extended period. Most ARM's have a lower fixed rate at the onset of the loan. During this time you can repair your credit so that you may refinance with a better home mortgage lender program in the future. The initial interest rate of ARM's are generally .5% to 2% lower than fixed rate mortgages. In many instances, the savings outweigh the risk if you plan to keep the loan less than 10 years.

How long does a loan take? This depends on the program, the mortgage lender's procedures, and how quickly you provide loan documents. The more you help the loan officer, the faster they can push your loan to close. One key is to provide all the needed documents upfront and get the appraisal done as quickly as possible.

What is the best way to improve your credit score fast? Basically a credit score is made up of these components: 35% of punctuality of payment in the past, 30% of the amount of debt based on the ratio of current revolving debt (credit card balances and others) to total available revolving credit (credit limits), 15% length of credit history, 10% types of credit used (installment, revolving, or consumer finance), and 10% recent credit enquiries and/or amount of credit obtained recently. The first step is to obtain a copy of your credit report. If you find discrepancies, get them corrected immediately as they may take several months to get properly reported. Next, pay down any credit card debt that is more than 40% of the available limit. Make sure you pay your debt on time. Maintain your longest standing account. The longer you have established financial history, the easier it is for creditors to know how reliable your credit scores are.

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