WHAT ARE SUBPRIME LOANS?
Good loans to good people with troubled credit. A whole new class of loan programs emerged in the 1990's that helped many people with less-than-perfect credit find an affordable mortgage. They are called 'Subprime Loans', and despite the bad press lately, there are many fine, reputable, Subprime lenders offering good loans to people just like you.
Many Americans have had credit problems at some point in their life. It happens to more people than you would think. Fortunately, there are some great new loans available for the credit-challenged. Here are a few of your options:
- 3-YEAR FIXED RATE
Similar to the traditional Hybrid Fixed-ARM Loan, this is by far the most popular subprime Loan. It is fixed for 3 years -- just long enough for you to repair your credit -- and then turns into an Adjustable Rate Mortgage for the remaining life of the loan. These loans typically come with a 3-year prepayment penalty, but the penalty can be reduced or eliminated if necessary. - 5-YEAR FIXED RATE
Identical to the 3-Year Fixed Rate, only the initial interest rate is fixed for 5 years. This loan may carry a 3-year prepayment penalty, but the penalty can be reduced or eliminated if necessary. - 30-YEAR FIXED RATE
These loans are just like regular Fixed Rate Loans, and can come with either 30 or 40-year terms. This loan may carry up to a 3-year prepayment penalty, but that penalty can be negotiated.
