Quote:
Originally posted by sebastian_dangerfield
BTW, when did a guy making $100k and taking out an ARM to buy a $500k house become a subprime borrower.
|
Subprime, Alt-A, and Prime in mortgage lending all depend on three major factors: Credit Score (credit history), total Income-to-debt ratio (ability to service debt) and Collateral value.
You can make $500k/year and have perfect credit but be sub-prime if you want 100% financing on a $5mm house and have no other assets. You can be prime making $30k/year with a so-so (but not bad) credit score if you are borrowing $40k to buy a $55k house in north-central PA.
