Sub-prime mortgage borrowers will see their applications turned down following lender’s new restrictions
Sub-prime mortgage borrowers will see their applications turned down following lender’s new restrictions, according to internet mortgage specialists, The Mortgage Broker.
Its research found that a quarter of all specialist and sub-prime mortgages that were accepted in August, would now be refused if following the changes to lending to high-risk customers.
The changes, which include tighter controls on loan to value and scrutinising credit history, are likely to impact on low income families and borrowers with poor credit rankings trying to get on to the property ladder.
Lisa Taylor from Moneyfacts says: “It used to be that almost anyone who applied for a mortgage got one. But the lenders have realised belatedly that this is not sustainable. These changes were necessary but there will be a significant impact.”
Chiltern’s Joanne Gill says: “More people will start to feel the impact on their finances as sub-prime mortgages are no longer an option for people who want to borrow their way out of debt.
“Instead of trying to release capital from your home to pay off debts, people should consider an informal debt management plan which will allow them to repay their credit cards, personal loans and store cards back at a level which is affordable for them.”
