The Subprime Mortgage is Back

The subprime mortgage, that earned a bad name from the recent real estate crisis, is emerging again. A borrower with “prime” attributes such as a high credit score and good income would qualify for a conventional loan. Whereas a borrower with “subprime” attributes such as poor credit and low income would only qualify for a subprime mortgage. Subprime mortgages come with a higher level of risk to the lender, and for this reason, the interest rates charged on a subprime mortgage are substantially higher than rates for a conventional mortgage.

Since the onset of the crisis, the subprime mortgage has all but disappeared from the list of loan programs offered by most banks. In fact, the subprime mortgage was blamed for the mass foreclosures that occurred after 2008, triggering a global financial crisis. But many of the self-employed have been unable to obtain conventional loans since 2008. This includes doctors, lawyers, and other self employed borrowers who used to rely on subprime mortgages to purchase homes and other real estate. Many of the self-employed have good credit but don’t qualify for conventional loans because they don’t claim sufficient income to qualify.

The good news for these borrowers is that many private money lenders are now offering subprime mortgage loan programs again. For example, we are offering a subprime mortgage with low documentation requirements with interest rates ranging from 7% to 9%. Although it is still much higher than an interest rate on a conventional loan, many of the self employed are able to use our subprime mortgages as a bridge loan to allow them time to qualify for a conventional loan. Curious about the requirements for our subprime mortgage loan product? Send us an email via our contact form on our site and we will respond to your inquiry promptly: http://privatemoneyutah.com/loan-request-form/