Lenders may not be using the word Subprime but they are open to phrases like “emerging prime” or “near prime”. Lenders are feeling better about charging rates at or near 10% for those with less than stellar credit. A recovering housing market has created confidence in the quality of even those types of loans.
There are a bunch of people out there who were hammered by the recession. As their situation improves, they are ready to make a return to the housing market. they are being targeted by lenders willing to work with credit scores as low as 600 and past discretions.
The difficult balance is the willingness to lend vs the rate being charged. One lender is offering loans up to $35k with repayment in 2-5 years at rates of 18-20%. I realize that won’t get us very far toward a home purchase but it does indicate a move in that direction.
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As the saying goes, Caveat Emptor! Beware of opportunities with high costs.
