- Understanding Credit Histories: Highlight the importance of knowing your credit history and understanding the factors affecting a subprime mortgage application, such as recent defaults, arrears, or CCJs. Borrowers should explore improving their credit score before applying.
- Deposit Requirements: Subprime lenders often require larger deposits (usually 15-25%) due to the increased risk of lending to individuals with bad credit. Explain how a higher deposit can help secure better interest rates.
- Exit Strategy: Subprime borrowers should plan to improve their credit score and remortgage to a prime lender in the future. Explain how making regular payments on a subprime mortgage can improve creditworthiness over time.
- Interest Rates and Fees: Subprime mortgages come with higher rates and potential additional fees. Borrowers should compare the total cost of borrowing and consider if waiting to improve their credit might provide better mortgage terms.
- Alternative Options: Suggest alternatives to subprime mortgages, such as guarantor mortgages or credit repair programs, to give borrowers a broader view of available solutions.
