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Subprime Loans for First Time Home Buyers

Are Subprime Loans Available for First-Time Home Buyers?

The term 'subprime loan' is one that gets a lot of grief in the media and in the minds of those shopping for homes and mortgages for people with a poor credit history today. That's because these types of mortgages were the main cause of the housing market collapse in the early 2000s. However, it's important to understand that for some people, subprime lenders have reappeared in recent years extending good options that are worth considering for new home buyers with poor credit or a unique situation that falls outside of the scope of traditional conforming mortgage programs. Millennial home buyers are beginning to embrace unique opportunities from non-traditional lending sources and this has helped stimulate home sales across the country.

First, it's worth understanding the basics of subprime loans.

  • These are loans that are given to those with lower credit scores or issues with their credit histories. Since the borrowers aren't the perfect candidate for a loan, they aren't "prime", and as such the term subprime loan is applied.
  • For several decades, subprime home loans have helped support home buying from government and private money lenders in the U.S.
  • Interest rates on subprime loans is affordable for millions of prospective first-time house buyers.
  • Most lenders may issue subprime-mortgage loans, but doing so means that they're taking on a greater level of risk. As a result, they'll charge higher interest rates, fees, and penalties.
  • Subprime loans can help rebuild credit, and many utilize them as a way to start working on improving credit before refinancing in the future.
subprime loans

First time home buyers are indeed eligible for subprime loans in many cases. The key is understanding that your credit score and history aren't the only factors in a loan – other things can as well like your debt to income ratio. However, even those with trouble documenting income due to being a subcontractor or having shifting, seasonal pay can apply for these types of bad credit house loans. There are a handful of subprime mortgage lenders that specialize in unique financing options for a multitude of reasons. Find out what the experts are saying the path is to buy a home with poor credit.

You can get a subprime loan today that is backed by the U.S. government even if your credit score is below average. We continue to hear rumblings from subprime lenders and brokers that easier credit rules will open the door for thousands of first time home buyers in 2018 and 2019. We believe this will help the Millennials who had been apprehensive to buy a home in previous years:

  • FHA – Since their inception, the Federal Housing Administration has been a big supporter of first time home loans for subprime borrowers. FHA insured mortgages for new house buyers are backed by the federal government and are often available in subprime packages. These feature lower down payment requirements, less strict credit scores, and more. They're easier to qualify for and can help first time home buyers get their dream property. If you are seeking help with a modular home loan find out if you are eligible. Buying a house with a no money down mortgage and bad credit is pretty difficult but with a 3.5% to 10% down you may find yourself getting approved. It is even possible to buy a home after a bankruptcy has been discharged 2-years.
  • Credit Unions – Credit unions have recently become a major player in the mortgage market. In fact, over the last two years their share of the mortgage market has risen from 7% to 11%, and the rise is likely to grow. These lenders often work with their members who may have credit history, and can be a good source for a loan if you're looking for a subprime option.
  • Private Money Lenders – This is a riskier option since they often offer harsh penalties and high interest rates. But, if you're serious about getting a loan for a home and have exhausted other options, there is a chance a private money lender could help. Subprime mortgage lenders offer hard money and non-prime mortgages are viable options for people with poor credit scores. Just be sure to understand everything about the loan before you sign, or you could risk putting yourself in a financial bind. The fact is that there are new subprime loans for first time home buyers that arise all the time. Even if you were rejected in the past, it is worth investing a few minutes so that you can see if the new lending standards are a good fit with your situation.

Simply put, subprime house loans are readily available for first time home buyers who need them. There are still various requirements in order to receive them, but if you'll take some time you should be able to find the right subprime loan program for your first time home buyer needs. Pay attention to interest rates, terms, and other basic factors and you will be able to move into home ownership and move your financial future forwards in a big way. Top 8 Reasons Home Buyers Get Turned Down for a Mortgage Loan.

Having the ability to uncover new options to borrow money from subprime mortgage lenders online makes buying a home more realistic than ever before. However, you need to do your homework when shopping lenders, brokers and credit unions that you are considering, so you lock into a mortgage that fits in nicely with your housing budget. If you do that, you will be able to start receiving the benefits of homeownership.


First Time Home does not offer subprime home loans. is a website that offers information about house financing and does not guarantee home loan programs for first time buyers directly or indirectly through representatives or agents. provides a news and information service by offering editorial content related to the housing and real estate finance industry.

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