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Subprime? Why Not?
Sub-prime lending is a much better option than Private or Hard money lending - if you qualify.
For a few years, I stopped doing conventional lending and switched to Hard and Private money lending. Hard money is hard cash. It requires 35% down, demands repayment within 6 to 12 months and rates can be pretty high (as high as 18%)! Private money may require less money down (maybe 20%), repayment may be 30 years and rates are usually around 8-12%. However, Private money is hard to find these days with the government making it harder for private people to lend money on primary residence.
I was thankful that when i got back into the mortgage business with conventional and government lending, guidelines loosened making it a little easier to qualify for a mortgage. For example, Fannie Mae now allows a person to include rental income using proof of a security deposit and rental agreement instead of needing 2 years tax returns and 25% equity in the home - Yay! FHA will offer a loan with scores down to 560 (with 10% down). However, like with most all companies, there are "tell-me” guidelines and then there are "prove-it" guidelines.
A "tell-me" guideline provides a LO with ... more
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