Yesterday I received an email a subprime lender promoting their new loan to value (LTV) limits based on credit scores. I thought it was a good reflection of the current LTV/credit score guidelines for this current market.
100% LTV @ 660 Credit Score
95% LTV @ 580 Credit Score
90% LTV @ 560 Credit Score
85% LTV @ 540 Credit Score
80% LTV @ 520 Credit Score
Interest rates were not provided with the email that I received, however, I would be they’re undesirable.
Someone with a 660 credit score, depending on what their actual credit history and financial portfolio looks likes, should actually be able to obtain other financing besides subprime, such as FHA or a Flex type program.
This is a sharp contrast to what was available a few months ago for subprime borrowers. And I’m amazed at how many phone calls I’m still receiving from people who know they have a credit score in the 500 range wanting zero down who are living paycheck to paycheck. I don’t blame anyone for wanting to own a home, it is touted as the "American Dream". But a 2-3 year prepayment penalty with a double-digit mortgage interest rate, is not.