Subprime Mortgage Credit

The federal government has made a number of credits and programs available for those stuck with subprime mortgages.

The main government program for those with subprime mortgages is called Making Home Affordable. This program makes tens of billions of dollars available to lenders that are willing to refinance subprime mortgages. Refinancing means that a mortgage will be converted from a subrpime mortgage, which has a higher interest rate; into a prime mortgage which has a lower interest rate.

A subprime mortgage is a mortgage issued to a person who doesn’t qualify for the standard or prime interest rate. Subprime mortgages usually have much higher interest rates and stricter terms than prime mortgages.

Many subprime mortgages are Adjustable Rate Mortgages. In an adjustable rate mortgage the mortgage lender has the right to raise the interest rate and increase the mortgage payments during the life of the mortgage. In a prime mortgage the interest rate and the mortgage payments stay the same.

Sources of Subprime Mortgage Credit

The best source of subprime mortgage credit is the federal government which has a variety of programs to help those with subprime mortgages. The Making Home Affordable Program and other laws make funds available for subprime mortgage refinancing.

A person can find out if they qualify for this program by contacting the Federal Housing Administration or their state housing authorities these agencies have a variety of credits available for subprime refinancing. Mortgage brokers may also be aware of programs and options for subprime mortgage refinancing.

Another source of subprime refinance could be the holder of your existing mortgage. This company might be willing to refinance a mortgage into a prime mortgage. Subprime mortgage credit could cover the costs of this transaction.

The federal mortgage companies Fannie Mae and Freddie Mac are also willing to refinance subprime mortgages. If your mortgage is held by one of these lenders you can check their websites for details of subprime refinancing.

Subprime Refinancing Tips

There are some things that you can do to make it more likely to get subprime mortgage credit. You’ll have an easier time getting refinancing if your credit rating or income has improved since when you got your mortgage.

Lenders are more willing to work with those who have higher credit ratings. They may also be willing to cut those who have a higher income or are willing to come with a large down payment a break on refinancing. Those who have paid off a large percentage of the principal of a subprime mortgage should also be willing to get it refinanced.

Subprime mortgage credit is available for those who are willing to look for it.