Sub Prime Mortgages
There's been a lot in the press recently above the growth of sub prime mortgages, with reports that the subprime market is set to grow faster than conventional home mortgages due to the number of people with financial difficulties.Market analyst Datamonitor said gross sub-prime lending rose 28 percent to 24.6 billion pounds in 2006. It said it expects the market to keep growing by 4.7 percent per year to reach 31.5 billion pounds in 2011. That compares with annual growth of just 2.6 percent in the mainstream market.
Britons have amassed a record persoanl debt of £1 trillion, and this coupled with the rising costs of borrowing, is leading to more persoanl bankruptcies and home repossessions. People are therefore increasingly turning to subprime mortgages as their only hope financing their home purchase.
So what is a subprime mortgage?
Subprime mortgages are those granted to a borrower who is considered to be a high-risk, that is, a person with a less-than-perfect credit report. Subprime borrowers have either missed payments on a debt or have been late with payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may run into trouble or default.
The higher risk to lenders is illustrated by the fact that mortgage arrears in the sub-prime sector are currently 20 times those of conventional mortgages.
How can Quick Move help?
If you have a bad credit risk and are haivng difficulty in securing an affordable re-mortgage rate, give us a call. We offer a sale and leaseback scheme, enabling you to sell your house to us, while continuing to live in it. Call us today on 01793 840 915.
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