The Sub Prime Mortgage Evolution

There was a time when a less than stellar credit history was a death sentence for those looking to secure a mortgage and own a home. Those who have experienced bankruptcies, liens, judgments or simply have a poor credit history due to frequently late payments were vilified, forced to seek mortgage loans from less than scrupulous lenders and pay extraordinarily high interest rates for the privilege of doing so.

In the late 1980s, usury laws in the United States were relaxed and sub prime mortgage loans began to gain popularity. As a result, legitimate and safe lending institutions tapped into a sub prime market that was previously shunned and ashamed by their bad credit history.

This sub prime mortgage evolution continued throughout the 1990s and today’s sub prime mortgage loans are redemption programs of sorts for people looking to repair their poor credit. As the borrower makes his or her payments and repairs his or her credit history, a refinance mortgage could be pursued in a year or so. It’s a life preserver, with the higher than usual interest rate the price for this second chance. For many, this second chance is in fact priceless, with both financial and emotional benefits.

In time, the sub prime mortgage will continue to evolve as the gap between prime and sub prime mortgages narrow. The stigma of poor credit is no longer a life long burden and inhibitor to home ownership. There are options and sub prime mortgage loans to be had by those who dare to dream big in spite of what came before.

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