What does the subprime loan market look like currently ?

[fastfredracing]

I need a big chunk, short term, maybe 6 months , till I either sell my home, or sell a few more rentals .
Im looking at a home equity loan
I have good credit, tons of equity , our personal home is paid off , and I will be coming into the deal with 50% of the value of the property cash.
But.... self employed . I made money consistently the last few years, but I am not setting the world on fire .
I am meeting with the credit union tomorrow , and my bank is on the job now.
Last time I borrowed money , it was the wild wild west. Showed them my bank statements, and had a mortgage in 14 days .
I miss the sub prime days .
I was in much worse financial shape when I bought my business property.

[RANDY P]

They will look at your actual filings to see if you turned a profit- at least enough to pay for the loan and your liabilities, especially your last filing.

In this case, assuming your tax returns show a profit, think of doing a 'free' loan- one where the lenders will pay all the closing costs. Rate will be higher but you won't lose equity to fees when it comes to payoff.

rjp

[LWJ]

Might look at hard money lender.

There are lots of people places willing to loan. They will take a more than fair share from you for this.

In your position, you should have no problem finding a lender. Question is, will it be too painful to buy the loan.

Best to you!

[MysticLlama]

I work in the hard money business, but don't think we can do PA.

The biggest factors:
Non-owner occupied.
Reserves in the bank for 3-6 months of payments.
Loan to Value of 80% or less, with 50%, you're fine.
Good credit helps.

Income doesn't really matter, it's all about the value of the place and loan to value, and appraisals can take forever right now, fyi. If the lender does an internal value it can be faster, but less leverage, at 50% down you're probably fine.

That said, if you have enough equity, your better/cheaper route is probably HELOC on your primary from a credit union if that can be made to work, just will be a little fussier on the paperwork side.

[RANDY P]

HELOC is cool. Even lower fees than a 1st.

rjp

[look 171]

Originally Posted by RANDY P

HELOC is cool. Even lower fees than a 1st.

rjp

I was thinking the same thing. Pay it back when you sell off other stuff.

[wilnj]

Just closed on a HELOC today. Only downside to quick turnaround on payoff is you’ll pay closing costs but interest rates are still ridiculously low that it won’t hurt too bad.


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[greglepore]

Yeah, just did a 50% ltv loan, it was the least proctological experience I've had dealing with a mtg lender.

[GH85Carrera]

OK, I am curious, how is a loan ever done "subprime" when the prime rate is 3.5% right now, are they making loans below 3.5%?

Our airplane loan is 5.5% right now. It would be nice to lower that rate, but I can't believe anyone is loaning money below 3.5%

[Sooner or later]

Subprime is not a loan with a rate below prime.

Subprime are loans to people with lower credit histories and they actually pay more for their subprime loan.

[Rick Lee]

I didn't know subprime still existed. There will always be high priced options for people with bad/no credit and low income and assets. But I don't know that stated income or no income/no asset loans still exist. Long before the subprime crisis those loans existed for people with impeccable credit and large down payments. The problems started when those loans became available to people who were landscapers, service workers, cash-only workers, had no down payment and everyone was betting on endless appreciation to eventually refi out of a subprime loan. Didn't end well.