Despite recent signs that the mortgage market may be on the way to recovery, the adverse credit secured loan market is still suffering. Bad news about defaults, foreclosures and high rates have left many wondering whether or not they should even try to get an adverse credit secured loan, particularly since many banks are no longer making it easy to get an approval.
Darren Cook from MoneyFacts said, “Last year the market for sub-prime was so competitive that some rates being offered were only fractionally higher than standard residential rates. Now, as lenders continue to factor in margins for higher risk, sub-prime customers are paying the price with rates up to 2.75% higher than the same time last year.
“Many borrowers on a light level of sub-prime assumed that if they kept on top of their financial affairs once their deal ended they would be able to move to a much cheaper standard residential deal, but due to stricter lending criteria from prime lenders this isn’t necessarily the case.
“If they can get a standard residential deal their new repayments could potentially drop as a better deal currently available on a two year fixed stands at 5.54%.”
Related reading : Adverse Credit Secured Loan
