What is a Sub prime Mortgage

A sub prime mortgage is primarily taken out by people with a poor or negative credit history. Because of their credit history, they are often unable to apply for a standard mortgage as they are seen as a default-risk. Financial institutions usually charge a much higher interest rate for a sub prime mortgage than they would a standard mortgage, in order to insure the risk they are taking.

If you have County Court Judgments against you or have been declared bankrupt, than you may have no choice but to apply for a sub prime mortgage and the higher interest rates that goes with one. You will have the option to remortgage in the future, if you have improved your credit rating you may qualify for a lower rate.Before committing to anything, it is always best to shop around for the best interest rates, even if they are higher than usual.

HSBC bank offers lenders the opportunity to apply for a sub prime mortgage and their mortgage rate is reasonable for a high-risk mortgage. Starting at 4.59% APR, this can be reduced over time and then fixed at the most favourable amount. The HSBC also has special offers and mortgage packages for their customers. They do have fees in place, ranging from £299 to £899 depending on whether you are a customer and the type of mortgage package application you need.

The Skipton Building Society also offers customers the option of a sub prime mortgage. Rates start at around 4.9% and are subject to a person's financial status. Skipton also offer a peace of mind mortgage insurance. This means your payments will be covered in the event of illness or unemployment.

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