In comparison with the traditional mortgage market, the non prime world works in a slightly different manner. Due to the increased risks involved, lenders employ a broader range of metrics by which they evaluate loan candidates. These metrics are then subdivided into categories ranging from, on the high end, "A+" and "AAA" to, on the lower end, "C-" and "D." Rather than being the final determination, the grade assigned, is merely used a basis from which rates and fees may be assessed.

Note: The following criteria outlines just one method, of which there are many, for determining a candidate’s qualifications for a non prime loan: Rates listed are wholesale prices that the lender charges to the mortgage bankers. In turn, these bankers will often add on their own service fees of about one half of a percent prior to determining the retail cost they extend to clients.

Areas of Considerations in Lending (preceded by applicable letter grade)

Mortgage Background

A. Typically permit one 30-days late payment on mortgage loan within the past year.

B. Typically permit up to four 30-days late payments on mortgage loan within the past year. On one of these payments, applicant may have also been 60-days late on a payment.

C. Applicant permitted to have made an unlimited amount of 30-days late payments, as well as, an unlimited amount of 60-days late payments. However, it is only permissible for candidate to have made one 90-days late payment.

Credit Background

A. Candidate permitted to have been up to 30-days late on three separate occasions in the past year. Payment may have been related to any credit card, auto loan or additional consumer-related matter. Credit score of a minimum of 600 (average) will help compensate for payments documented as being late.

B. Candidate not permitted to be more than 60-days late on any payment within the past year. Payment may have been related to any credit card, auto loan or additional consumer-related matter. Only in very infrequent circumstance, will late payments up to 90-days be permissible. Credit score of a minimum of 560 (below average) will help compensate for payments documented as being late

C. Candidate not permitted to be more than 90-days late on any payment within the past year. Only in very infrequent circumstance, will late payments up to 90-days be permissible. Payment may have been related to any credit card, auto loan or additional consumer-related matter. Credit score of a minimum of 540 (significantly below average) will help compensate for payments documented as being late

Chapter 7’s, Chapter 13’s and Foreclosures

A. Customer who filed Chapter 7 bankruptcy must have cleared up the matter a minimum of three years prior. Plus, there is a two-year waiting period for those who filed Chapter13 and agreed to make partial repayments. Foreclosures require a five-year waiting period, plus the candidate must now be in good financial standing.

B. Customer who filed Chapter 7 bankruptcy must have cleared up the matter a minimum of one year prior. Plus, there is a two-year waiting period for those who filed Chapter13 and agreed to make partial repayments. Foreclosure incidents require 2 year waiting periods, yet candidate does not need to have reestablished a good credit rating.

C. Customer who filed Chapter 7 bankruptcy filing must have cleared up the matter minimum of one year prior. One year again waiting period for those who filed Chapter13 and agreed to make partial repayments. Foreclosures require a one-year waiting period, yet candidate does not need to have does not need to have reestablished a good credit rating.

Collections/ Charge-offs, etc.

A. Candidate may not have any credit card write offs accounting for more than $500 worth of debt within the previous year. One exception may be if the candidate possesses a credit score of at least 600. Candidate may not have any open claims or liens against the property and mortgage can not be less than two years old. Exception may be if the candidate intends to use funds being requests to cover costs of open property claims.

B. Candidate may not have any credit card write offs accounting for more than $2,500 worth of debt within the previous year. One exception may be if the candidate possesses a credit score of at least 560. Candidate may not have any open claims or liens against the property and mortgage can not be less than two years old. Exception may be if the candidate intends to use funds being requests to cover costs of open property claims.

C. Candidate may not have any credit card write offs accounting for more than $5,000 worth of debt within the previous year. One exception may be if the candidate possesses a credit score of at least 540. Candidate may not have any open claims or liens against the property and mortgage can not be less than one-year old. Exception may be if the candidate intends to use funds being requests to cover costs of open property claims.

Overall Debt-to-Income

A. Candidates not permitted to have financial obligations greater than 45 percent of their gross monthly income. B. Candidates not permitted to have financial obligations greater than 50 percent of their gross monthly income. C. Candidates not permitted to have financial obligations greater than 50 percent of their gross monthly income.

Upper Amount Limits for Loan

A. Candidate may receive a loan up to $400,000, at 95 percent Loan-to-Value, if willing to extensively document earning, assets and other pertinent financial statements.

B. A. Candidate may receive a loan up to $400,000, at 85 percent Loan-to-Value, if willing to extensively document earning, assets and other pertinent financial statements.

C. Candidate may receive a loan up to $200,000, at 80 percent Loan-to-Value, if willing to extensively document earning, assets and other pertinent financial statements.

Interest Rate Note: Charges based upon 30-year fixed loan at 80 percent Loan-to-Value

A. 9.75 percent
B. 10.63 percent
C. 11.63 percent

Source: SouthStar Funding