 With an increasing number of mortgage
lenders offering "Bad Credit" Loans, also know as "Subprime" Loans,
borrowers identified as bad credit or high risk should be able to find that lenders are
more willing to accommodate your needs. Nearly every major mortgage institution is
entering the "Subprime" lending market. Consequently, more borrowers that do not
meet the traditional credit criteria should qualify for mortgage loans. A this market
expends, vigorous competition amoung mortgage lenders willing to take on more default risk
will produce better interest rates on "Subprime" loans.
Subprime mortgages are made to borrowers that do not meet the traditional credit criteria
or to people with unconventional borrowing needs, including those for loans that exceed
100 percent of the property's value. Issues preventing borrowers from meeting the
tradional criteria could be a low downpayment, high debt ratio or low reserves at
settlement and past credit problems: bankruptcies, defaults, foreclosures and chronic late
payments on debt obligations.
Subprime and other "Non-traditional" mortgage lending is categorized into credit
grade categories based upon the borrower's creditworthiness. A borrower will typically
fall into one of five categories: A, A-,B, C or D. Several factors contribute to the
credit grade on "Non-Traditional" lending such as past credit history, debt
ratio and income documentation. The more serious the credit problems and higher dabt
ratiko, the lower the credit grade. Lenders will assess a lower grade on loans when little
or no documentation is provided to substantiate the borrower's income.
As the credit grade on loans decreases, lenders generally assess higher interest rates and
fees. Until recently, the evaluation of loan applications was left to human underwritiers
who relied on their own judgement to categorize loans by risk level. Using computerized
loan-evaluation systems capable of forecasting the default risk dictated by each mortgage,
allows lenders to determine the individualizeed interest rates charged to each borrower.
The lower-risk borrower will receive a lower interest rate than the higher-risk borrower.
We have provided links to "Bad Credit" or "Subprime" Mortgage Loan
specialists who can help you find the best Mortgage Loan Program for your very specific
loan requirement and credit criteria. Simply email Jan at: BadCredit@Mortgage2USA.com. There is never an
obligation or cost involved.
Or use our "Visitor Info Request Form".
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