Subprime Mortgage Lenders

The number of subprime mortgage lenders has fallen substantially in recent years because of the subprime mortgage crisis.

It is still possible to get a subprime mortgage but the interest rates on charges on such mortgages are much higher. There are still many subprime mortgage lenders in business but they are now more selective in their lending. Many people who got subprime mortgages a few years ago wouldn’t be able to get them today.

Subprime Mortgages Explained

A subprime mortgage is a mortgage with a higher interest rate issued to those who are considered too risky to get a standard or prime mortgage. Hence the term subprime mortgage.

Subprime mortgage lenders specialize in making mortgages to those who can’t get prime mortgages. These borrowers include those with bad credit and people with low incomes. In the past those people often had a hard time getting mortgages.

The subprime mortgage crisis occurred because subprime mortgage lenders lowered lending standards. This enabled many people who couldn’t afford to make their mortgage payments to get mortgages. When these people couldn’t pay their mortgages many of the subprime mortgage lenders went out of business.

Finding a Subprime Mortgage Lender

There are still many subprime mortgage lenders operating in spite of the subprime mortgage crisis. The best place to find these lenders is online where many lenders still make direct subprime mortgage loans.

The way to find subprime mortgage lenders is to enter terms such as bad credit lender or no money down mortgage into a search engine. This should produce a list of lenders who make subprime mortgage loans.

Subprime mortgage lenders charge much higher interest rates than other mortgage lenders. They also impose stricter terms and issue different kinds of mortgages. For example subprime mortgage lenders are more likely to issue Adjustable Rate Mortgages

When to Get a Subprime Mortgage

An individual should only apply for a subprime mortgage when they can’t qualify for a regular mortgage. Don’t think about getting a subprime mortgage until after you try and get a standard 30 or 40 year mortgage with a fixed rate. Such mortgages are better because they come with lower interest rates and smaller payments.

Subprime mortgages will come with higher interest rates and bigger payments. Many subprime mortgage lenders add a lot of mortgage insurance to their loans which can greatly increase the payments. Others will use adjustable rate mortgages in which they can raise the interest rae or the payments during the course of the mortgage.

Individuals should only get a subprime mortgage as a last result. For those with bad credit renting and saving money for a down payment is usually a better option than a subprime mortgage.