In large part, Non-Prime Mortgages are like the Sub-Prime mortgages from back in the 2000’s; the difference being Non-Prime mortgages and sub-prime is non-prime lenders are more responsible. Safe loan programs and responsible guidelines the nature of which are congruent with the purpose of the Ability-to-Repay Rule as well as the investor base behind the loan programs, guidelines, rates, features, etc.
Regarding credit, typically, non-prime lender guidelines allow for derogatory credit like one day after “major credit event”: bankruptcy foreclosure, short sale, deed-in-lieu, mortgage lates (up to 1×60 days late) in previous 12 months and lower credit scores down to 520 for both conventional and unconventional, Non-Qualified mortgage loans. Non-prime alternative income and employment documentation starts with a 600 credit score. 580 credit score with compensating factors.