Not surprisingly, women are statistically more likely to end up with a subprime product than men. This is due to the fact that many women are single parents and head of household. They still make significantly less than men do, and typically shoulder the lion's share of the burden of raising the children alone, both economically and emotionally. This of course, makes them more of a lending risk.
However, in the big picture, if a subprime loan is all a woman can secure due to her economic factors, that I believe she is still better off purchasing her own home than continuing to rent. It is more expensive, but still worth the investment in the aggregate. This should be done only with good counsel from her REALTOR and Mortgage Professional such that she doesn't get in over her head. The best strategy in my opinion is to buy a home that is a solid investment with a strong likelihood of appreciation. Even if this ends up to be a tiny cottage, most of the time it's still a better option than continuing to rent.
Subprime lenders are sinking faster than the Titanic these days. Still, people with bad credit (defined as FICO's in the 500's and low 600's) can still get a home loan. However, it's getting tougher. If your credit is very bad, be prepared to put some money down. Also, you can say goodbye to the "stated loan". Prepare to provide documentation regarding what you can and can't pay.
I enjoyed this article in Newsweek about this subject. The author gave some very good advice at the very end:
"Many subprimes today want a minimum score of 600 or 620. So pay off as much debt as possible and don't let your credit-card balances go above 33 percent of their credit limit. And start saving for that down payment.
For those already in danger of sinking in subprime debt, try your best to stay afloat; a lifeboat may be on its way. Sen. Christopher Dodd says he plans to introduce a law that would essentially allow you more time to solve loan problems before foreclosure. In the meantime, lenders urge troubled borrowers to keep in touch. It's in everyone's interest, they say, to keep you in your house. Try to work out a deal—your home may depend on it."
Jennifer Bunker, CRS, GRI
Utah Real Estate Broker
To stop rise in foreclosures, mortgage modifications are more common now.
Not surprisingly, women are statistically more likely to end up with a subprime product than men. This is due to the fact that many women are single parents and head of household. They still make significantly less than men do, and typically shoulder the lion's share of the burden of raising the children alone, both economically and emotionally. This of course, makes them more of a lending risk.
Subprime lenders are sinking faster than the Titanic these days. Still, people with bad credit (defined as FICO's in the 500's and low 600's) can still get a home loan. However, it's getting tougher. If your credit is very bad, be prepared to put some money down. Also, you can say goodbye to the "stated loan". Prepare to provide documentation regarding what you can and can't pay.
Sour subprime loans have devastated lenders, dashed the hopes of borrowers, disappointed banks, and demanded tighter standards—but has the recent shake-up altered the risky mortgage landscape for good? Read more here ...
