Prime Mortgages

If you have a good credit rating, you are likely in line for a prime mortgage. Prime mortgages have the best interest rates and terms, and therefore are the most affordable mortgage options. If you qualify for prime mortgages, you will find that all of the mortgage types can fall into this category.

How to Qualify

The most important way to qualify for prime mortgages is to have a good credit rating. Your credit rating is determined by your past credit history. If you have carried some debt, paid it on time every month, and have a low debt to credit limit ratio, you will have a good credit score. In order to qualify for prime mortgages you will also need regular employment. Those who are self employed may not be eligible for prime mortgages, but will instead need to look for self-certification mortgages.

Lenders look at your credit rating and employment status to determine how much of a risk you are as a borrower. A good credit rating makes you a good risk. A poor credit rating makes you a bad risk. If you have a good rating, your interest rate will be on the low end of what the lender offers. Prime mortgages often have rates that are just a little higher than the Bank of England’s base rate.

Loans for Poor Credit

If you have a poor credit rating, you will not qualify for prime mortgages. Instead, you will have to apply for sub-prime mortgages. These loans have higher interest rates and sometimes carry additional fees. Sub-prime mortgages are the only choice for those with a bankruptcy or individual voluntary agreement in their past financial history.

If you are in the market for sub-prime mortgages, take a close look at your finances before applying. Make sure that you can really afford your mortgage. If you end up in a mortgage that you cannot afford, you could end up having your home repossessed.

Improving Your Situation

Perhaps you cannot qualify for prime mortgages. This is not a problem. If you are ready to become a homeowner and can afford a sub-prime mortgage, go ahead and buy your home. You can use your mortgage to work towards improving your credit rating. By making payments on time each month, you will gradually increase your credit score.

Once your credit rating is where it should be, you can remortgage to a prime mortgage. This way you can be working towards building capital in your home, while also working on improving your credit rating. Soon you will find yourself in an affordable prime mortgage and enjoying the home of your dreams.