Subprime LTVs and Credit Scores

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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. 

Comments

  1. What are the ballpark rates for these FICOs?

  2. Hi Mikey, Subprime loans are not easy to ball park rates with; like a conforming 30 year fixed with 20% down payment. There are too many factors to consider. If you want to email me a scenario, I can provide you with a rate quote. Thanks for reading my blog.

  3. Rhonda:

    For us in the mortgage industry, we realize what “100% LTV @ 660 Credit Score” means.

    But, as you state, many borrowers still think that 100% is applicable for…well…anyone. Maybe it’s a good thing that the American dream, for some, temporarily, is not realized until they can achieve much more favorable loans.

  4. Richard, I worked with manyh people (as I’m sure have too) on improving credit and assets to be in a position to have a more favorable mortgage.

    Hey…I’m still waiting for your book! 😉

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