Options for mortgage borrowers with adverse credit

As a consequence of the pandemic, more people who have adverse – poor – credit are applying for mortgages. According to research conducted by Pepper Money, customers with adverse credit are more positive about their prospects for a successful mortgage application than they were six months ago.

The specialist lender found that 52% of adults with poor credit, who were looking to purchase a property in the next 12 months, were concerned about having their mortgage application declined due to their credit history.

This has decreased from last autumn when over two thirds (69%) of people with adverse credit and looking to buy a property were concerned about having their mortgage application declined.

However, the most recent study found that only 6% of homeowners who had experienced adverse credit before buying their current property said the blight on their credit report had resulted in a declined mortgage application.

We are undoubtedly seeing more cases with varying degrees of adverse credit since the start of the pandemic. What’s more, we are also starting to see lenders create product ranges which cater for borrowers with adverse credit, especially those with slightly heavier adverse or more complicated circumstances.

These lenders have also recognised the value of providing these to certain specialist finance brokers like ourselves, as we have the experience and expertise to help these customers and have been doing so for 30 years.

The relationship we have with some of the specialist lenders ensures that some will allocate an onsite underwriter to our offices (during normal times) who will purely look at impact’s cases.  This ensures certainty of decision and underwrite and in return, the lender receives volume, quality business and increased completion conversions.

In addition, due to our investment in technology, we are making it easier for clients to enquire and provide information securely online which then helps us assess their circumstances quickly and recommend the most suitable lending options.

Our customer portal allows customers to complete information about themselves, plus upload documents and then we can continue to communicate via this secure portal throughout the mortgage application journey.

Our experience shows that customers now have every right to be more positive about applying for a mortgage if they have some form of adverse credit and more and more lending options are becoming available to make owning a home a reality for many of these customers than ever before.