Sub Prime Mortgage Articles
If you are looking for a mortgage but you have a bad credit history this section of the site may well help. Here you will find links to our sub prime mortgage articles which explain the things you should know before selecting the type of mortgage that will best suit your circumstances.
Let’s start with the basics of a Sub Prime Mortgage
Sub prime mortgages are a specialist mortgage product. They are known by many different names, depending on the lender you choose. Sub prime mortgages may be called adverse credit mortgages. Sub prime mortgages may be called non status mortgages, credit impaired mortgages or bad credit mortgages. Whatever the name used for sub prime mortgages, they all refer to the same thing – a product for those who do not meet the standard criteria for mortgages.
More and more people need sub prime mortgages these days. That’s because many people do not meet high street lenders’ criteria for mortgage loans. With most high street lenders, you have to have a near perfect credit report, be employed and be able to prove income, have a consistent address and credit history and show other signs of financial stability. These people benefit from the best interest rates, while rates for sub prime mortgages tend to be higher.
However, not everyone has had the perfect circumstances and this is why subprime mortgages have become so important. There are several reasons why people might need sub prime mortgages. Sub prime mortgages are important for people who have had County Court Judgements (CCJs) against them. CCJs are all too easy to get in these days of rising debt. It only takes a small unpaid debt for a company to petition the court to enter a judgement against you. This means that the company has some guarantee that they will be paid, but it does nothing at all to help your credit rating.
There are several other reasons why people may need subprime mortgages. If you become ill or lose a job and are unable to make mortgage payments, then the arrears or defaults will appear on your credit record. Many people find themselves experiencing financial difficulty in the wake of relationship breakdown and may find that they just can’t make all the payments they need to make. Eventually, they may resort to sub prime mortgages to get their finances straight again.
Of course, some people may not be in financial difficulty, but may still need sub prime mortgages. Many self employed people are in this category, because it can be difficult for them to prove income. They may go for a self employed mortgage, which is another of the terms for sub prime mortgages. And people who have lived out of the country may not appear on the electoral roll. Without a proven address, they may have no choice but to opt for sub prime mortgages. The good news is that sub prime mortgages can be used for credit repair, which means you could soon be eligible for another type of mortgage.