Subprime loans is a non-qualified mortgage. It is a fact that not everyone will qualify for a qualified mortgage such as the FHA home loans. With strict guidelines barring many otherwise qualified people from qualifying for a loan, non-traditional lenders have filled a niche where they offer non-qualified loans with flexible qualification requirements.
In fact subprime loans are so popular that Equifax’s National Consumer Credit Trends Report shows a total of 312,000 new subprime mortgage originations, totaling $50.7 billion during the first 10 months of 2015.
Why Are Subprime Loans So Popular?
One of the reasons these loan types were so popular before the economy tanked was that it was an easy loan to get. Now the subprime loans available today are not so easy to get but they are making a comeback in a big way because they are much easier to get. With low documentation and credit score requirements, most people who would not otherwise qualify can get a subprime loan.
But, they come with some disadvantages. They are definitely more expensive and require larger down-payments than the loans offered by traditional lenders. The current subprime loans do require some qualification criteria to be met by all borrowers including reserve requirements.
Why The Subprime Loan Is Making A Comeback?
So one reason is that it is easier for people with adverse credit history to qualify for this type of loan. There are also more subprime lenders coming into the market which means the competition make these loans more accessible to borrowers therefore more borrowers are able to get the loans they want.
We have a full range of hard money loans available in addition to the subprime loans including stated income loans and bank statement loans. Please contact us for more detailed information or to apply for a subprime or other loan.
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