Sub prime Mortgages

kathryn123_2

oh OK, sorry i mis-understood. They send me a default notice every month with my statement, maybe be better to stop paying completely & wait for them to send it to DCA.

Trollfever

Have you looked at your credit report recently?

Mrs_Bumble

kathryn123 wrote: »

oh OK, sorry i mis-understood. They send me a default notice every month with my statement, maybe be better to stop paying completely & wait for them to send it to DCA.

If they send the debt to a DCA then the outstanding debt will increase significantly, speak to CAB, CCCS or national debtline.

Johnny_Chaos

kathryn123 wrote: »

We have a sub prime fixed rate mortgage that comes to and end 1st October & we would really like to fix again, However current lender have no fixed deals available & the broker we have asked said there are currently no sub-prime lenders offering new lending. The SRV is very attractive at the moment but we are worried about the future. Does anyone know of a lender willing to help?

As others have said: the willingness of a lender to help will depend very much on your LTV. If you took out your mortgage circa-2007, as is likely the case if you are coming to the end of a two-year fixed deal, then your property will, as far as mortgage providers are concerned, have decreased in value. So you may have less, and possibly negative, equity, which will hamper things more than a poor credit rating.

I don't mean to put a downer on it, because it's not the end of the world.

You can take advantage of the low SVR. (I suspect base rates will stay low for a long time (at least another 12 months) - a sudden increase would deepen the recession as people would be spending more money on their mortgages, starving other businesses of income.)

In my view (and I may be wrong): interest rates will only increase when mortgage availability increases. So, if you settle for your lender's SVR for the next year or two, then if rates increase I suspect the mortgage market will be in a position to offer you a solution.

Johnny.

Johnny_Chaos

Conrad wrote: »

I expect new sub prime deals to begin appearing in 12-24 months based on conversations I have face to face with lenders (as opposed to internet hearsay nonsense)

No disrespect, but that's slightly worrying. "Sub-prime" is one of the reasons why the economy's presently in such a dire state: people with severe debt problems being given unaffordable mortgages based on ridiculous multiples of their supposed income. (I am not in any way impying that this is the case with the OP, by the way.)

Lots of people have no doubt benefitted from sub-prime deals (such as those with medium- to low-adverse credit, or the self-employed - where they would have otherwise struggled to find a lender); but brokers have caused a lot of misery by selling mortgages to people who they knew could not really afford them. I don't want to see a return to that sort of lending.

I do, however, want lenders to start looking more favourably on people with medium-adverse credit (one or two CCJs, defaults, etc) so that they have a chance of getting a mortgage. The fact that someone's defaulted on, say, a catalogue account does not mean that they will default on a mortgage. I would also like to see lenders offering 95% LTV again.