Upside Down Mortgage

Posts Tagged ‘economics’

Subprime And Prime

Question: We are looking at downsizing our home, but don't want a subprime mortgage.?

I have heard stories that many people that should have qualified for prime mortgages were placed in sub prime mortgages. How can we ensure that we are not placed in a subprime mortgage. Our scores average 680-700. I am sure that is well above what is required for prime mortgages.

Answer: Mortgage rates are mostly determined by credit scores and loan to value of the property. If you are downsizing I would assume you will have equity in the current home which you may be applying towards the down payment of the new property. This being the case you will be fine on both qualifying criteria.

Rates would be currently in the low 5% range.

Be sure to look at scenarios with no points and with 1 point. The loans with 1 point or an origination fee at "par" have had better rates of as much as 1/2% in this market.

If you are putting down more than 20% with the credit scores you listed FHA is not a good choice. (FHA has similiar rates but you would have mortgage insurance even with 20% down on a 30 year fixed)

Subprime loan defined:

A loan offered to an individual who does not qualify for a loan at the prime rate due to their credit history. If a lender thinks that there is an above-average risk involved in giving a loan to a certain individual they will sometimes offer them a sub prime loan. Usually the interest rate is higher than the prime rate.

Subprime mortgages really are not available anymore.

Your mortgage application on page one should have the boxes checked for "conventional" 30 year "fixed" or whatever term you elect.

Good luck with your new home purchase

subprime derivatives

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Subprime Assets

Question: Politicians in Washington to prevent current economic crisis ?

Now that President Bush has proposed to buy 700 billion in bad assets, what should have the politicians in DC as well as Wall Street, done to prevent this current economic mess? What were the causes? Was it mainly because of Fannie Mae and Freddie Mac involvement to give mortgage loans to people with either poor credit, little or $0 money down, subprime lenders, etc?

Answer: It was the lack of regulation that caused this nightmare.

Al Gore on sub-prime carbon assets

Subprime Crisis Credit Crunch

Question: Which countries will benefit from the financial crisis?

Are then any countries that will come out stronger as a result of the credit crunch and subprime crisis. Russia seems to have bought the nation of Iceland! Are Latin America and Asia in a better state to weather the storm than America and Western Europe?

Answer: I think all countries which are getting aid from America will be affected. Since it is a major economic power and industrially and scientifically and in every aspect advanced in the world, the repercussions of economic crisis in America will be felt in almost all parts of the world.

Sub-prime crisis - what next in banking? Credit crunch / sub-prime crisis and mortgages, interest rates, share prices, house prices. Comment by keynote conference speaker on Future of Banking and Financial Services - Dr Patrick Dixon