How to identify Prime & Sub-Prime lenders?

chriz1000

How do you know if a lender is prime or sub prime? Is it just by the rate that they will offer or is it to do with something else?

dan1979

Sub-prime lenders do have 'prime' products as well but it's just based on what they offer product-wise. You'll never got a sub-prime mortgage on the high street and although you can go direct with some generally won't have heard of them unless you see a broker.

Is there a particular lender you're thinking of?

homer_j_3

I would say typically they will follow LIBOR rate rather than BOE but thats more rule of thumb than the definitive answer.

As dan has said, sub prime lenders do have prime products and that in itself should indicate that it could be a subprime lender as prime lenders do not normally define their products as prime.

Ultimately, there is no one answer that is definitive so if you come across a lender and are unsure, just ask on here and one of the brokers will be able to furnish you with the answer you require.

chriz1000

No it was just a question in general really. I guess I was wondering if my current mortgage is prime or sub-prime too? I’m with Bristol & West and have a self cert mortgage the interest rate is 6.55% fixed for 5 years.

homer_j_3

ha ha - now you may be classed as non-conforming due to not having the proof of income and non-conforming and sub-prime are usually in the same corner when you are talking about this.

I wouldn't classs B&W as a subprime lender though personally - more a specialist lender. They are owned by the Bank of Ireland .

Xeno

If you took on a sub-prime or non-conform and made all your payments, would a lender rather move you to a lower APR after a few years or let you move elsewhere?

MortgageMamma

that depends on your individual contract with the lender, but in most cases you are free to move after the "incentive" term i.e. the 2, 3 year fixed/tracker or whatever you chose