01 November 2010

Home Loans For Those With Bad Credit Histories

As the recession begins to make its tentative steps towards some sort of recovery, prospective buyers who have been turned down elsewhere, begin to find they can apply for mortgages once again.

Whereas the pre-recession market housed such ‘sub-prime’ candidates and indeed this is what most thought caused the financial breakdown, post-recession it has been virtually impossible for those persons with a bad credit history to acquire a mortgage.

Now, almost three years on, a handful of lending companies have begun to repeat the sub-prime practise, with companies including Precise Mortgages, Kensington Mortgage Company and Aldemore lending to those customers with a flawed credit history.

So why are companies starting to lend to these kind of clients again? Such clients can be a massive earner for lenders due to ‘bad credit’ products holding much higher interest rates than standard financial products. Not only this, but the market for sub-prime products is enormous, with so many people unable to attain home-loans in recent months; banks understand that where there is demand, they should really be supplying.

Financial data shows that mortgage lending has declined by from £162 billion to a £112 million from August to September and this has encouraged the beliefs of economists who are predicting the likelihood of a double-dip recession.

No comments: