Sub Prime Interest Rates

I am no expert on this and try to pick up as much as I can, volunteer with a very worthy establishment and hear many stories.

I understand what you are saying, I think :eek:, if a Sub Prime Lender can do it, why cant a mainstream bank?

Most people have their accounts through the mainstream banks and hence that establishment can see all with a touch of a button.
 
They don't want the hassle. Simply really.

GE, Start etc etc are there to pick up the business the big boys don't want.
 
bond-007, you are spot on. Just a pity though that they can make a small fortune out of people who things may have went wrong on them in their lives and are now trying to sort their future out.

If the mainstream banks took on these lenders, and say and extra 1% was added to the current interest rate, would the bank be making a sizeable profit.

Just say they would do this for the first maybe 3 years and then agreed to allow these borrowers, that have had no problems paying their payments, join in with the rest of the country on the normal interest rate.

Also, maybe you or someone else can answer a question for me. A person I personally know, mortgage with mainstream lender, was changing from fixed or variable over to tracker, and a phone call done it. How does the bank know that person still has same income. Bank Statement?
 
carrielou said:
Also, maybe you or someone else can answer a question for me. A person I personally know, mortgage with mainstream lender, was changing from fixed or variable over to tracker, and a phone call done it. How does the bank know that person still has same income. Bank Statement?
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Who cares as long as they are making the repayments. They are not remortgaging, just changing mortgage type.
 
Prime lenders refuse applications largely because they believe that the customer cannot afford the repayments, or cannot prove their ability to repay in a manner satisfactory to the bank.

Over half the current applications for house repossessions before the courts are from Start Mortgages, a sub-prime lender. It would appear that the prime lenders were right not to offer these people a loan.
 
The sub prime lenders go straight to repossession after 1 missed payment. They use repossession as a bargaining tool.
 
But maybe, just maybe, if half of that half had been on normal interest rates as opposed to 8.5 to 9%, then maybe they would not be in court.

Does anyone happen to know what % of house repossessions are down to separation and divorce?
 
Hi All, I am also with Subprime lender(Start mortgages) My rate at the mo is 6.75% and I called them to see if they were going to pass on any reduction and it seems unlikely as yet, really peeves me off as I am paying close to 3k per month for the mortgage and finding it tough, hubby has changed jobs so as soon as we can apply for Prime lender mortgage we will do so. Problem is now that the banks may not qualify us for the amount that were granted initially due to them restructuring their lending policies, leaves me at boiling point.. Very difficult for people to turn it around when the banks have probably halved the amount of funds they are willing to lend out..
 
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