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Mortgage News
Rates 'soaring' on subprime mortgages - 04/12/2007
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There has been a significant rise in interest rates on subprime mortgages recently, according to one sector specialist.
Senior technical manager at John Charcol Ray Boulger said that people may find it increasingly difficult to get approved for a subprime mortgage as lenders push up the cost of borrowing and impose stricter criteria.
Homeowners who have not managed to improve their credit status and are aiming to remortgage to another sub-prime mortgage look set to find it especially difficult to find a lender, Mr Boulger noted.
"There are going to be some people who will really struggle to get a remortgage and there will be those who can't get a remortgage," he asserted.
People in such a position may be forced to stay with their current lender on a deal with a reversionary rate, which he said may escalate into double figures.
Such consumers may be forced to sell their home, while others may have their properties repossessed, he observed.
"Unfortunately I think there is little doubt that there is going to be quite a sharp increase in repossessions next year," said the senior technical manager.
The Royal Institution of Chartered Surveyors predicts that some 45,000 homes could be repossessed in 2008.
© Adfero
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