Complete Mortgages launch subprime mortgage service

Friday, 17th June, 2016
debt management plan

Guildford mortgage broker, Complete Mortgages, has vowed to demonstrate how ‘subprime’ is no longer a dirty word following the launch of its latest offering – a subprime mortgage brokerage service.

The mortgage and insurance brokerage, which launched in 2005, has introduced the sub-prime lending service in conjunction with the appointment of sub-prime mortgage specialist, Mark Lucas (pictured above), who joined the rapidly growing firm on 1 June.

Unlike the pre-crash sub prime lending of the mid-2000s, sub prime mortgage lending of today is no longer based on granting loans to those who simply claim to be able to afford mortgage repayments.

Applying for a sub-prime mortgage is now a more thorough process, in which lenders insist that that applicants can only apply if their adverse credit rating and poor credit score is a result of an ‘unexpected event’ such as divorce or business failure.

On joining Complete Mortgages and spearheading its subprime mortgage offering, Mark Lucas comments: “This is a great opportunity on two levels. Firstly, I’m looking forward to a new challenge and establishing Complete Mortgages within a new market segment. Secondly, I’m looking forward to help change perceptions of sub prime home loans and communicate how they now operate within a much tighter framework and are subject to greater levels of scrutiny.”

The brokerage claims that unlike the prime market, whereby computers often make key decisions, brokers providing subprime mortgages can spend time understanding an individual’s circumstances and evaluate reasons for poor credit scores before making a decision.

Mark Finnegan, Director at Complete Mortgages, adds: “We’re delighted to welcome Mark to Complete Mortgages and have no doubt that he will be a great asset to the team. There is understandably still a stigma attached to the subprime mortgage market following the most recent financial crisis. However the financial services industry has never been more stringent when it comes to deciding what products can and cannot enter the market. Moreover, those who are now classed as having an adverse credit score or a poor credit history through no fault of their own should not be blocked from homeownership. Our latest service aims to make mortgages accessible to those who, for many years now, have been effectively locked out of the market.”

For more information on Complete Mortgages’ sub prime mortgage service or to apply for a subprime mortgage contact 01483 238280 or email info@completemortgages.co.uk.


Why ‘subprime’ is no longer a dirty word

Wednesday, 25th May, 2016
adverse credit mortgage

Looking back to the crash of 2007/8, when subprime lending was in its prime, it is easy to be scathing of an arrangement that was, arguably, instrumental in the collapse of the economy, the impact of which was felt by many people for many years.

Since then, we’ve seen – and continue to see – the tightening up of the financial services industry and a focus on making the UK economy as robust as possible.

Quite recently, we’ve also seen the resurgence of the subprime lending sector, too.

Is this revival a sign that we haven’t learnt from our mistakes? Is the industry heading once again towards financial irresponsibility? I believe that the answer is ‘no’, and here’s why.

A tight ship

The regulatory work that has been implemented by the Financial Conduct Authority since the financial downturn is unprecedented. Never before have professionals and companies, such as Complete Mortgages, had to adhere to so many rules and guidelines. Put simply, the financial services industry currently works within a much tighter framework and is subject to much more scrutiny. Any products available within this framework, even subprime products, will have faced intense scrutiny before being released to the market.

Niche, not the norm

Unlike the pre-crash period, whereby subprime mortgages were easier to access and where less evidence of affordability was required, subprime 2.0 is aimed at a much smaller demographic. There were cases of multiple subprime mortgage products being granted to one person on the strength of the fact that that person simply stated that they could afford to make their mortgage repayments. This is no longer the case; those applying for a subprime mortgage need to provide evidence that they are financially robust enough to be granted a sub-prime mortgage loan in the first place. In fact, most lenders insist that applicants can only apply if their poor credit rating is a result of what is referred to as an ‘unexpected event’.

Unforeseen circumstances

Nobody can predict the future. Of course, we all make decisions based on the information we have at any given point in time but nothing is guaranteed. Businesses fail, people are made redundant and marriages, sadly, fall apart. In fact 130,473 UK couples divorced in 2013 and whilst it was the lowest level in 40 years, it’s still a significant number and one that is likely to contain a proportion of people whose separation places more pressure on their finances. The unexpected does happen and setbacks do occur. And when they do, isn’t it only right that rather than be excluded from homeownership, those affected are provided with an option that enables them to maintain some sense or order?

The new wave of sub-prime mortgages

It is worth noting that those who need to apply for a subprime mortgage will pay more than those applying for standard mortgage products. However it’s also worth reiterating that the post-crash subprime mortgage has been created to cater for those who have experienced a financial setback and who, as a result, are now classed as having an adverse credit score – even through no fault of their own.

Life is never black and white; there are always shades of grey in-between. The new subprime mortgage acknowledges this. Unlike the prime market, whereby decisions are made, in part, by computers, brokers providing subprime mortgages spend more time listening to an individual’s circumstances before making a decision. And that, from my perspective, can only be a good thing.

Get in touch with Guildford mortgage broker, Complete Mortgages, if you would like to discuss what subprime mortgage products are available to you. Contact 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages