Powered by MOMENTUM MEDIA
subscribe to our newsletter

US subprime mortgages making a comeback

One of the biggest trending stories last month on CNNMoney was that subprime mortgages – or low-doc loans – were making a comeback.

 

Borrowers with bad credit were shut out of the mortgage market after the US housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again.

Once synonymous with toxic, adjustable-rate mortgages – like the "exploding ARMs" that led many homeowners to lose their homes to foreclosure during the housing bust – subprime mortgages are once again being offered to borrowers who pose a higher credit risk.

This time the loans are much more costly.

Advertisement
Advertisement

PROMOTED CONTENT


During the housing bubble, lenders were handing out subprime loans with cheap teaser rates and little or no down payments.

Now lenders are charging interest rates as high as 8 per cent to 10 per cent and requiring borrowers to make down payments of as much as 25 to 35 per cent.

US subprime mortgages making a comeback
mortgagebusiness

Latest News

Preliminary ABS data has revealed that the value of residential construction work done has declined in the September quarter to its lowest l...

Westpac and its subsidiaries have reduced its owner-occupied and investment property fixed home loan rates, effective 24 November. ...

Defence Bank has appointed two new board directors and announced the retirement of long-term director Lieutenant Colonel Craig Madden. ...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Responsible Lending - what could lie ahead for lenders, brokers and borrowers?

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.