Thousands face new sub-prime status say National Homebuyers

There may be a surge in the number of people looking to sell and rent back their homes as mform warns that thousands of borrowers may soon be reclassified as high-risk by their lenders.

[UKPRwire, Thu Oct 11 2007] According to the firm, between 40,000 and 60,000 home buyers will be coming off fixed-rate deals every month between now and August next year.

In light of the recent credit crunch, many of these people will find that they are now considered to be sub-prime borrowers.

This will lead to an increase in their mortgage rates and could lead to financial difficulties for many.

"There has been a significant increase in the number of people struggling with making repayments, which means many will have damaged their credit ratings and now be seen as being sub-prime by lenders," said mform's marketing and business development director Francis Ghiloni.

"This means that lenders will either decline to offer them a mortgage or only provide one at a much higher rate of interest," he added.

Julian King from National Homebuyers, the UK's leading quick house sale company says, "Consumer need to be aware that the sell and rent back market is crowded with individual operators who are liable to go bust mid-way through their tenancy.

"We strongly recommend that consumers find a national company that, like National Homebuyers, has a proven track record in providing a secure Sell and Rent back option for customers".

Many mainstream mortgage lenders increased their rates on variable mortgages following the global credit squeeze.