Sub Prime Mortgage Lenders

A sub-prime lender is a mortgage lender who lends to borrowers that would not qualify for loans from mainstream mortgage lenders. Some of these sub prime mortgage lenders are independent, but increasingly they are affiliates of mainstream mortgage lenders operating under different names.

Sub-prime mortgage lenders base their rates and fees on the same factors as prime mortgage lenders. For example, if you have a low credit rating or you make a smaller down-payment, your mortgage rate will certainly be higher. However, the entire structure of mortgage rates and fees is higher from sub-prime lenders, to cover the greater risk and higher costs of sub-prime mortgage lending.

Your credit rating is a record of any previous loans or credit agreements you may have arranged in the past. Any missed payments, CCJs, arrears and previous mortgage applications are recorded in this file.

Having a clean credit record is a good recommendation for mortgage lenders - the equivalent to a good CV for borrowers. If you have repaid any previous loans on time, with no difficulties, you will have a clean reference for any future financial applications.

However, blemishes on your credit record, caused by factors such as mortgage or rent arrears, as well as County Court Judgements (CCJs), defaults, decrees and bankruptcy, will discourage mortgage lenders from loaning you large sums of money, resulting in many refused applications and a lot of frustration.

If you believe you may have bad credit it is important you do not start enquiring to multiple lenders as this will further damage your credit rating.

Instead it is worth considering lenders who specialise in the bad credit mortgage market, referred to as sub prime mortgage lenders. If you have any questions regarding sub prime lenders or adverse credit mortgages, do not hesitate to contact one of our specialist mortgage advisors.