Subprime Mortgage Lending Explained
What is subprime mortgage lending?
Subprime mortgage lending differs from standard or prime mortgage lending because it is specifically designed for people who have adverse credit, or a bad credit history. Subprime mortgage lending products provide an opportunity for people who would be turned down by the traditional mortgage market to fund a house purchase, giving them the chance to get on the property ladder.
How could subprime mortgage lending help me?
If you have had credit problems, or had a mortgage application declined previously, then you may need to consider the benefits of subprime mortgage lending . No matter how bad your credit history is, there should be a subprime mortgage lending product that meets your needs. It will give you the capital you need to buy your home, or to remortgage or take out a second mortgage to help reduce your debts. Keeping up the payments on your mortgage also shows that you are serious about improving your credit and you may find that your credit rating improves over the time of the mortgage, as long as you also keep control of your other debts.
How do I research subprime mortgage lending?
You can research the subprime mortgage lending market on your own, but a better solution is to use a dedicated mortgage broker. Use a mortgage broker that is regulated by the Financial Services Authority (FSA) as they will have strict guidelines and recommendations to work within, ensuring that the advice you are given is always for your benefit, not the benefit of the broker. In addition, you should check that the broker has experience of the subprime mortgage lending sector. They should have access to a wide range of suitable products, and have contact with each lender, which helps them to sort out and problems or difficulties you may encounter. Choosing the right broker helps to take the stress out of the process for you, leaving you to concentrate on your other finances.
How do I know if the subprime mortgage lending company is right for me?
If you are using a mortgage broker, they will look at your current circumstances and the monthly amount you can afford to pay, and use that information to select a few subprime mortgage lending products that will suit you. Even so, you should make sure that you have all the information you need to make the best choice. You need to know exactly what the costs of the subprime mortgage will be, including interest and any fees. You should also be aware of any restrictions or penalties that the subprime mortgage lending company may impose on you, so that you can plan for refinancing or over-payments to help clear the loan. The more you know about your loan, the greater your chance of paying it off properly and improving your credit rating. Your broker will be able to help you distinguish between the subprime mortgage lending companies that will help you and the ones that are trying to make money from you. That’s one of the reasons why it’s extremely important that you search out the best advice.