How to Qualify for a Subprime Loan

Step-by-Step Guide

1. 1

   Step 1: Call lenders and ask if they offer subprime loans.

   Ask about their rates and fees, and their cash with the subprime loan, then choose the lender you are most comfortable making a loan application with.
2. 2

   Step 2: Gather supporting documentation to make your case for a loan approval.

   This should include:
   Proof of income.
   
   Provide 2 month's worth of pay stubs, direct deposit statements and/or anything else that could count as your monthly income.
   
   Bank statements.
   
   This includes checking, savings and money market accounts, and is necessary to prove you have the money for a down payment and closing costs.
   
   In some instances, when you cannot provide documentation to prove your income (self-employed, retired, etc.), you may be able to use bank statements to prove cash flow.
   
   Monthly expenses.
   
   Your subprime mortgage lender will want to see at least 2 month's worth of timely payments on all utility bills, rent/mortgage and credit accounts. ,, Getting a subprime loan approval is not an exact science and you may have to go back to the drawing board several times before your package is considered credit-worthy by the lender.
3. 3

   Step 3: Complete the application and sign any necessary paperwork in order to allow the lender pull your credit.

4. 4

   Step 4: Prepare to be asked by the lender for additional documentation

5. 5

   Step 5: explanation and/or proof of your ability to repay the loan.

Detailed Guide

About the Author