Is there any way out of a sub prime mortgage?

excav

Would like some help with the following if possible:

About 7 years ago I got into some payment difficulties and the only option open to me at the time was a "subprime" mortgage. My bank had turned me down and basically said to apply again in a few years "when I have prooved my ability to pay". As like many other people I thought the subprime route was only a temporary thing until I could reapply for a "normal" mortgage at a decent interest rate.

I have managed to pay my subprime mortgage over the 7 years and I have made many attempts to get a normal mortgage from my bank in the meantime, but they have always turned me down as I think it takes 7 years to clear your poor credit rating. Unfortunately for me since I have improved my credit rating, the banks are closed for business (no matter what they say) so I have no hope of getting a mortgage from any of the regular banks.

I have come to the point where I can no longer continue to pay my mortgage on time (mainly due to the high interest rate) and will no doubt have a poor credit rating again. I have given up all hope of ever getting a mortgage from a regular bank. I have paid nearly 140k in mortgage repayments but have only seen about 15k coming off my balance due to the high interest rate.

All I want is a mortgage at a normal interest rate.

Would appreciate any ideas/advice.

chris85

excav wrote: »

Would like some help with the following if possible:

About 7 years ago I got into some payment difficulties and the only option open to me at the time was a "subprime" mortgage. My bank had turned me down and basically said to apply again in a few years "when I have prooved my ability to pay". As like many other people I thought the subprime route was only a temporary thing until I could reapply for a "normal" mortgage at a decent interest rate.

I have managed to pay my subprime mortgage over the 7 years and I have made many attempts to get a normal mortgage from my bank in the meantime, but they have always turned me down as I think it takes 7 years to clear your poor credit rating. Unfortunately for me since I have improved my credit rating, the banks are closed for business (no matter what they say) so I have no hope of getting a mortgage from any of the regular banks.

I have come to the point where I can no longer continue to pay my mortgage on time (mainly due to the high interest rate) and will no doubt have a poor credit rating again. I have given up all hope of ever getting a mortgage from a regular bank. I have paid nearly 140k in mortgage repayments but have only seen about 15k coming off my balance due to the high interest rate.

All I want is a mortgage at a normal interest rate.

Would appreciate any ideas/advice.

Whats your interest rate at the moment? Would you consider selling the property. SInce you bought 7 years ago you may be around neutral equity and you may be able to cut your losses.

excav

I think the interest rate is currently around 8% but not 100% sure as I have stopped looking at the rates and just try to concentrate on making the repayment each month. I had it suggested to me a few months ago to try to switch to another subprime lender to try to get a slightly better rate but I dont see this as an improvement on the situation as the repayments that I have made on the current mortgage should stand to me in the future should I fall behind on the repayments rather than starting afresh with a new subprime lender.

I wouldnt consider selling the house, if I sell I will never be in a position to get another house so where do my family and I go from there.

chris85

excav wrote: »

I think the interest rate is currently around 8% but not 100% sure as I have stopped looking at the rates and just try to concentrate on making the repayment each month. I had it suggested to me a few months ago to try to switch to another subprime lender to try to get a slightly better rate but I dont see this as an improvement on the situation as the repayments that I have made on the current mortgage should stand to me in the future should I fall behind on the repayments rather than starting afresh with a new subprime lender.

I wouldnt consider selling the house, if I sell I will never be in a position to get another house so where do my family and I go from there.

Unfortunately its unlikely you will be able to get a mortgage elsewhere as i am sure you are aware. You can try again but you may have to wait a few years.

8% is high but unfortunately you foolishly entered into a long term contract with a lender with the hope of another lender bailing you out of it. Very bad financial decision as you are banking on a everything going right for you and getting approved by other lenders.

I have sympathy for you but to a limited degree and the reason is the reputable banks (hard to say that now :rolleyes:/) said you were a risk but you went forward with it down the subprime route and now here you are. You got the rate associated with your risk category.