Subprime Mortgages Ready for Another Whirl?

Good home6_14Just when the U.S. economy is getting back on its feet, so are subprime mortgages. As reported in today’s Times (“In Home Loans, Subprime Fades as a Dirty Word”) these once-sketchy loans are being offered to those who might not otherwise qualify for a traditional mortgage.

My husband and I took out a subprime mortgage in 2005. It resulted in the loss of our home. So, buyer beware. (Read My Story for a glimpse. Better yet, wait for my book, Bankruptcy: A Love Story, in rewrite.)

If you don’t know what a subprime mortgage is, the Times definition is helpful:

Traditionally, any loan to someone with a credit score below about 640 (the highest possible score is 850) has been considered subprime. During the housing bubble, when lenders were hungry for loans to package into securities for resale, the subprime label expanded to describe all manner of schemes, including loans with low or no down payments, “liar loans” with no proof of income and loans with a monthly payment so low that the principal actually increased over time.

I’m blogging about this today because knowledge is king (or queen). If you’re shopping for a mortgage, know what you’re signing onto. These new subprimes, which only represent a tiny portion of the market today, extract interest rates that top double digits.

Talk, share, know. We’re responsible for our own money lives.


One thought on “Subprime Mortgages Ready for Another Whirl?

  1. Maria Dessi says:

    Janet, been enjoying reading your blog.
    Yes, Gratitude….. When I am in ‘an attitude of gratitude’, it keeps me stable in so many ways. It’s a balance between my needs and wants. When I can appreciate what is in my life such as basic needs, love of family and friends, and nature’s beauty, it pales what I think I WANT!! And that keeps me out of financial trouble….
    Keep those thoughts coming.

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