Mortgage providers will provide customers with varying levels of interest rates based on a number of factors. Your credit history will be a major basis for this, and so only people with excellent levels of credit will receive the very best rates. These rates are known as prime rates, and mortgage providers often borrow money from the banks at this prime rate. Generally speaking, the prime rate that the banks offer the mortgage companies will have a direct effect on what kind of rate you will receive. But the biggest factor that will affect this as previously mentioned is your credit history.

A sub-prime mortgage is different to a regular mortgage as these are intended for people who have a poor credit rating. This is done as people who have a poor credit history are typically seen as being a much more risky investment, and so they charge higher interest rates to make up for this issue. There are many different names for a sub prime mortgage and these are…

• Adverse credit mortgages.
• Non status mortgages.
• Credit impaired mortgages.
• Bad credit mortgages.
• Sub prime mortgages.

Regardless of the name, all of the mortgages will charge interest rates over the prime interest level. These are intended primarily for people with a bad credit rating, but these days they are becoming increasingly popular. This can be due to a number of reasons. For example some people may be self employed and thus may have trouble proving a consistent salary, whilst others may have suffered from an illness which in turn has given them a poor credit rating. There may be a wide range of plausible circumstances that has led to a poor credit rating, but regardless of what they are it is likely that you will have to apply for a sub-prime mortgage.

The interest rates that you will have to pay will generally be more expensive, but at the same time a sub-prime mortgage allows you the opportunity to rebuild this damaged credit rating. This is great news for people who may be interest in a sub-prime mortgage, but it can be seen as bad news for those people with a good credit rating. This is because increased lending will drive up house prices, but never the less sub-prime mortgages are becoming increasingly available.