Today's Mortgage Rates

Subprime Loan Candidates

Subprime loans come with higher interest rates and are generally provided those individuals with poor credit history thus making them risky for both the borrower and lender.

Subprime lending can also be beneficial to these individuals as they would not be qualified to receive a home loan through a conventional loan. By acquiring a subprime loan the borrower will have the opportunity to purchase a home. But the Subprime Loan industry has recently come under fire.

Risks of Subprime Loans

Subprime Loans come with much risk as can be seen with the recent foreclosure rate rising. The borrowers who could not qualify for conventional lending, including FHA Loans, saw their interest rates jump through the roof to a point they could not pay the mortgage. But the fallout is not just restricted to the borrower as many lending companies have filed for bankruptcy as well.

FHA Loans are a great alternative to subprime lending and should be looked at as such. If an individual sustains hardships with payments the FHA will help in arranging payment plans and options that will benefit both parties. You will also be able to get a FHA refinance through the FHA to take advantage of lower rates. So if you are in the market for a mortgage and are concerned about your credit history, a great option could include investing time to research the FHA Loan option or by reviewing our FHA Lending Guide.