These loans do not meet the borrower credit requirements of “A” or “A-” category conforming loans, so if they are your only option for obtaining a home, then go for it.
The good news is that more lenders now offer these subprime loans. So, if you are a high-risk borrower, chances are you will have a better shot at getting a loan today than borrowers did in the past. Nearly every major institution is now entering the non-traditional lending market, which means better rates for you and other consumers.
Because mortgage lending is divided into various credit grades, several factors will influence whether you receive, say, a “B” or “D” designation, including past credit history, documentation, and your debt to income ratio. The more serious the problems, the lower the grade and the higher the rates and fees – although they will not be as outrageously high as they once were.
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