On August 28, 2005, Ron Usner from NHS spoke about the dangers of sub-prime and LIBOR loans. If you have additional questions about these loans, or feel that you are at risk, please contact NHS at 504-899-5900.

Loans, and the paperwork involved, can be confusing. Make sure you know what you are signing!

Prime Loans:
Prime loans are loans that are made to a person who has good credit, verifyable income, no recent bankruptcies, etc. Prime loans usually have a low interest rate, few fees, and are a good way to purchase a home.

Sub-Prime Loans:
Sub-prime loans are the opposite of prime loans. They are loans that are made to a person who has bad credit, recent bankruptcies, or undocumented income. Sub-prime loans cost more than prime loans, and should be avoided whenever possible.

Unfortunately, not all lenders have your best interests in mind. Greedy or unscrupulous lenders make sub-prime loans to people with bad credit or undocumented/little income, and then charge very high interest rates and fees. If you have difficulty making your payments, they will take your home.

LIBOR ARM:
A LIBOR ARM loan is an adjustable rate mortgage that is tied to a different index than most prime loans. The LIBOR loan can have higher interest rates than prime loans.

A LIBOR loan starts out with a low interest rate and reasonable monthly payments for two, or sometimes, three years. Then, the interest rate and the payments will change - possibly increasing twice a year. That means that your monthly payment may go up, every six months!

Our advice: Please think twice before signing for a sub-prime or LIBOR loan! It may solve your problem now, but cause problems in the future.

"I want to buy a home, but I have bad credit, a recent bankruptcy, or little income. What can I do?"

It's unlikely that you will be able to get a prime loan in the near future. But, if you are willing to work hard over the next few years to establish your credit and good savings habits, there are still ways for you to purchase a home, without putting your family's future at risk.

Call NHS at 504-899-5900 and we will help you work out your problems. We helped over 100 people last year purchase their first home, and we can help you, too.

"I think I have a sub-prime loan and I'm worried about making my payments. What can I do?"

First, gather all of the documents you signed when you bought your house. Don't be intimidated. It's not too late to understand what your loan means.

Second, call NHS at 504-899-5900. We can read over your loan documents with you, so that you understand everything that you signed.

After going over your documents with you, we can work together to decide what the next step is. We counseled over 400 people per year, and we can help you, too.