How one couple was able to obtain a mortgage despite their history of bad credit

Katie and Thurston knew that their bad credit might prevent them from getting a low-interest rate mortgage, but they decided to try anyway. Thurston’s mother had recently died, and if they didn’t buy her house, it would be lost. That house held a lot of sentimental value for Thurston, who had grown up in it. In fact, the house had been in his family for over fifty years. As a result, the couple was frantic to obtain funding; the thought of losing the house was extremely upsetting.

While they were not surprised that their application was turned down, the couple was extremely disappointed. Their mortgage lender representative, Steve, was sympathetic to their cause. He had really grown fond of the couple throughout the application process. He called Katie and Thurston in for one last meeting, this time for advice.

“Listen,” Steve said. “Under normal circumstances, I would advise you to wait on buying a house until you could clear up your credit issues. But since I know how important it is for you to buy this house, I think you should consider a subprime loan.”

Katie and Thurston weren’t familiar with subprime loans, so Steve went on to explain that they carry unusually high interest rates, but accepted borrowers with dodgy credit histories.

“One more thing,” Steve said, as they walked out of his office. “Make sure that you refinance after a couple of years, or those interest rates are going to kill you.”

And that’s just what they did. While paying the exorbitant subprime interest rate for the first few years was frustrating, Katie and Thurston faithfully made payments. They also managed to get their credit histories cleaned up. Eventually, they were able to refinance.