Another issue that lenders look at is your tradlines and thier history. It is possible to have a very good score with no accounts showing up on your credit report. If that's the case you may have to get a subprime loan.

Even if it is determined that you are a sub-prime borrower due to a variety of factors, you may still qualify for a great rate. There are many banks who are very aggressive in this marketplace who want this business. The best approach is to contact a mortgage broker, who has access to numerous programs through many different banks, to find out the absolute best program you can qualify for.

A loan approval is based on several factors such as your credit, assets, equity, income to debt ratio, and the type of property. If you change anyone of these factors your approved rate could change (go up or down). Proper planning with your mortgage advisor will go a long way to accomplish your goals of getting the best possible rate.

Even if you have prefect credit and an 800 credit score this may not guarantee you the absolute best rate out there. Consider the type of financing you are looking for. If you are looking to buy a home but you have no money for a down payment or closing costs and you can not show adequate income documentation to qualify you, then you may need to use more of a "creative financing" type loan. You may need to go with a stated, no documentation, or no ratio type loan. Match that with the fact that you also have to go with 100 percent financing and you could be looking at a rate that is 1-3 percent higher, if not more, than the best rates out there. Therefore, even though you have excellent credit and a great credit score you could still need to obtain a subprime loan because loan approval is not based on just credit and credit scores alone. There are many other factors that effect what type of loan you will qualify for. Therefore, consult a mortgage professional early on when looking to buy a home to find out what kind of borrower, subprime or conventional, and loan will be best for you so that you can look for homes that will fit within your budget for the mortgage that you will qualify for.

How easily can you document and prove your income? Many conforming borrowers can prove their income with their tax returns and W2s. Other borrowers have complicated pay structures, are self employed, are paid on commission, or do not pay taxes on their income. If this is the case then a subprime loan with relaxed income documentation may be best. There are even some loans that require no income documentation and no job history to qualify granted you have a strong credit profile and good credit scores.

Normally, the difference between subprime borrowers and conforming borrowers is their credit score. Lower credit scores (under 600, generally) means the borrower is subprime. Subprime mortgages have higher interest rates.

"Subprime Borrower" - A borrower with less than perfect credit. However, there are still many financing programs available to assist them.

Its not the borrower that is subprime but the loan they take.

Some typical subprime lenders include First Franklin, Argent, Option One, Decision One, and Delta Funding.

In the subprime market there are many lenders who have a special niche that they are able to serve better than anyone else. If you have unique challenges due to your credit history, employment situation, etc a qualified broker will be able to find the lender that will be the best fit given your personal situation.

Some subprime borrowers have good credit but have difficulty proving all of their employment, income, or assets. Subprime niche lenders often have specialized programs tailored to meeting these borrowers needs.

Just because you happen to fit into the "subprime" category, doesn’t mean you should be gouged with excesses fees to do your loan. But please keep in mind your loan will be more expensive than most to do however, because the loan requires many more hours of work for your mortgage professional to find, place, and complete the process.

There is typically a "story" to accompany a sub-prime loan. In other words, the borrowers looking for such loans typically desire cash out for debt consolodation, credit card payoffs, home repairs, divorce settlements, etc... For one reason or another, the equity built on these homes, for refinances, become a potential solution for short term cash requirements.