Non-conforming loans
Loans that fall into “B, C or D” paper profiles are the non-conforming loans. They are often offered to high credit-risk borrowers with a detrimental credit history by portfolio lenders. Portfolio lenders don't intend to sell their loans so they can be more liberal about their borrowers' eligibility requirements. However, these loans, often called jumbo loans, generally have a higher interest rate than conforming loans.
With the variety of loan possibilities, it is important to consider your needs in conjunction with the options available before making your loan choices. Your decision is often influenced by the amount of payment you can afford and how long you plan on staying in your house. Unless your intention is to stay long term, you may want to consider an option other than a fixed rate mortgage, such as an ARM or Hybrid loan. Some of these options allow for lower interest rates in the earlier stages, with options to convert or phase into a fixed rate over time.
