Despite the introduction of tough new regulations that test a borrower’s capacity for repaying a home loan, sub-prime mortgages are making a return to the UK mortgage market.

The Mortgage Review was introduced to make sure that people were only being given loans to buy property which they could afford to repay. However, there are still companies which will offer mortgages to those with a poor credit history or who have had financial difficulties. The drawback to this is that the interest rate will be much higher than the current low rate deals which are now available.

The sub-prime mortgage market has mixed opinions, with some believing that they assist borrowers who have had some bad luck with finances in the past and others believing they are a return to the days of irresponsible lending. This type of mortgage is currently labelled as a home loan for those who have an adverse credit history. Although this type of mortgage seemed to disappear for a while, when the new regulations were introduced, they have made a comeback.

The loans are available to people with a range of financial issues, including bankruptcy and CCJs. The loans may even be available to those who have had mortgage arrears in the past, as long as they weren’t in the last 12 months.

A mortgage adviser who is professionally qualified with a CeMAP qualification, will be able to help you make the most suitable decision when applying for a mortgage.

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