Tri Planning Real Estate

Rise of Nontraditional Mortgages
Monitoring housing today entails tracking an array of mortgage products. In the past few years, a fast-growing market seized upon such arrangements Short Swing Trading as “option ARMs,” “no-doc interest-onlys” and “zero-downs with a piggyback.” For our purposes, it’s sufficient to distinguish among prime, jumbo, subprime and near-prime mortgages.

Prime mortgages are the traditional—and still most prevalent—type of loan. These go to borrowers with good credit, who make traditional down payments and fully document their income. Jumbo loans are generally of prime quality, but they exceed the $417,000 ceiling for mortgages that can be bought and guaranteed by government-sponsored enterprises.

Subprime mortgages are extended to applicants deemed the least creditworthy because of low credit scores or uncertain income prospects, both of which Turn $200 into $4630 in 30 Days reflect the highest default risk and warrant the highest interest rates. Near-prime mortgages, which are smaller than jumbos, are made to borrowers who qualify for credit a notch above subprime but may not be able to fully document their income or provide traditional down payments. Most mortgages in the near-prime category are securitized in so-called Alternative-A, or Alt-A, pools.

Popularity: 33% [?]

Filed under: Home, Real Estate by harelydavidson