Subprime Mortgage Lenders – Differences Between Subprime And Other Lenders

Subprime Mortgage Lenders – Differences Between Subprime And Other Lenders

Subprime mortgage lenders specialize in offering financing to people with poor credit or riskier loans. Conventional lenders focus on low-risk loans and borrowers. While you will find better rates with conventional lenders, suprime companies offer more flexibility in requirements and loan terms.

Easier To Qualify For

Subprime mortgages are easier to qualify for than traditional loans. Since these lenders are willing to accept a higher level of risk, they offer a variety of packages. For example, someone with bad credit can still find a zero-down 30 year mortgage. You may also opt for a lower rate with an ARM or fixed-rate home loan.

For jumbo or unconventional loans, you may have to work with a subprime lender. Since these types of loans are harder to sell to the secondary market, some conventional lenders wont handle them.

Higher Rates

For the increased level of risk, subprime lenders charge a higher rate, usually a couple points more than a conventional loan. You may also find more fees or points, especially if you want to waive early payment...

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