FHA Refinance VS Sub Prime Refinance
The ABC’s of refinancing
A = “A-paper Loan” This means you meet the guidelines
for Fannie Mae and Freddie Mac for a normal mortgage.
B = “B-Paper loan” This means you do not meet
guidelines for Fannie Mae and Freddie Mac. Typically this
borrower has a recent bankruptcy, serious credit
problems or can not afford the payment you are going
to get on the loan. Or your income can not be
documented to show you can make the required
payment.
C = “C-Paper Loan” means your credit is bad and the
lender employees guys like Rocko and Bruno who collect
if you are late on a payment.
An FHA Refinance is an “A-paper loan” with the same
credit requirements as a “B-Paper loan”. A Sub prime
loan can be B, C or even D paper loan. Sub prime loans
are used to get people in a mortgage until they can
qualify for an “A-Paper loan”. The problem comes about
when people who qualify for “A-Paper loans” get in to
sub prime loans because they want a house that they
can not afford and bite off more then they can chew.
The borrower can make the payment in the first year or
two but then get stuck in payments and interest rates
that may exceed their credit card.
A = “A-paper Loan” This means you meet the guidelines
for Fannie Mae and Freddie Mac for a normal mortgage.
B = “B-Paper loan” This means you do not meet
guidelines for Fannie Mae and Freddie Mac. Typically this
borrower has a recent bankruptcy, serious credit
problems or can not afford the payment you are going
to get on the loan. Or your income can not be
documented to show you can make the required
payment.
C = “C-Paper Loan” means your credit is bad and the
lender employees guys like Rocko and Bruno who collect
if you are late on a payment.
An FHA Refinance is an “A-paper loan” with the same
credit requirements as a “B-Paper loan”. A Sub prime
loan can be B, C or even D paper loan. Sub prime loans
are used to get people in a mortgage until they can
qualify for an “A-Paper loan”. The problem comes about
when people who qualify for “A-Paper loans” get in to
sub prime loans because they want a house that they
can not afford and bite off more then they can chew.
The borrower can make the payment in the first year or
two but then get stuck in payments and interest rates
that may exceed their credit card.
| FHA Loan Programs |
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