Prime & Subprime Lending Attorneys
Helping Clients Get Fair Treatment
Whenever a bank makes a mortgage loan to someone at a higher interest rate than prime, they make more money from the borrower. This is known as predatory lending and it is known to have devastating effects on the borrower who is subjected to a higher monthly payment and a longer loan period. Our LawZebra attorneys can help you find a way out of a predatory loan.
What are Prime & Subprime Lending?
If you have good credit, banks roll out the red carpet for you when you want to buy a home. They offer the lowest (“prime”) interest rates, on their loans and give incentives such as dropping application fees or removing the requirement to buy monthly private mortgage insurance when you buy a house. Lenders want borrowers with good credit because there is less risk involved in lending to them. If you have good credit, there is a good chance you will repay on time every month.
If you have a low credit score or have not yet established a credit record, you may have trouble getting a loan with a prime interest rate. Shady lenders can charge exorbitant interest rates, knowing full well that high interest rates make it more likely that you will default on your loan. Many consumers succumb to their offer of a quick fix loan to “solve” their credit card or student loan debt problems. These are types of sub-prime lending.
Even “Prime” Lenders are Guilty
Not every bank tries to take advantage of consumers, but consumers across the country are taken advantage of daily. A shady auto dealer might advertise a prime interest rate but then charge a $3000 “dealer fee” because they are “giving” you a low interest rate on a car. The reality is that the lender is just hiding their predatory terms in the fine print.
How Subprime Loans are Predatory
Subprime loans may seem like an easy fix when you need something, but often the devil is in the details. With a low credit score or no credit, these predatory lenders hold out hope to you that you can have it all. However, once you obtain the loan, you realize that the fine print included fees that were rolled into the loan while you weren’t paying attention. You could also realize that you can’t afford your new mortgage despite the reassurances of the lender. These types of lenders want to deceive and manipulate you into falling for their trap. They want to make money from you while delivering a bad product.
Sometimes when you have bad credit, it is necessary to take out a subprime loan in order to rebuild your credit. However, before signing anything, do some research about what kinds of loans are available to you. Don’t just believe what a salesperson tells you. There are important facts that they can purposefully leave out in their presentation. Before taking on any loan, make sure to read the fine print and look carefully at the annual percentage rate, find any hidden fees in the line by line itemization, and know what you are getting into.
We Offer a Free Consultation
When you realize you are deeply in debt, it can feel like there is no way out. Don’t give up though, as there are laws to protect you as a consumer. Call us for your free consultation so that our attorneys can see how to help you. If you have been taken advantage of by a predatory lender, you may not even know it. We often help consumers who did not understand the terms of the loans they took out. Our LawZebra attorneys are committed to protecting your rights to the fullest extent of the law and seeking monetary damages for you when possible. With our help, you can move into financial freedom again.
Call us today at (801) 820-9955 to schedule your free consultation.