Adverse credit buyers more likely to seek advice

Adverse credit buyers more likely to seek advice
Credit: Chris Ratcliffe/Bloomberg

Buyers with adverse credit are now more likely to seek advice from a mortgage broker, research has found, as it pointed to a "perception gap" in this group.

Research from Pepper Money found two-thirds of adults with adverse credit in the past three years, and who are looking to buy a property in the next 12 months, said they would seek advice from a mortgage broker, up from 57 per cent in February.

Pepper Money surveyed 4,000 respondents in August, of which 537 had experienced adverse credit in the past three years.

Paul Adams, sales director at Pepper Money, said: “If this trend of seeking professional advice continues, we can at least be sure that customers are giving themselves a better a chance of securing a mortgage that meets their circumstances, however complex they may be.”

Perception gap

The research also found that 69 per cent of adults with adverse credit were concerned about having their application declined while 27 per cent thought they would have to wait longer than five years to apply for a mortgage after being registered with a County Court Judgement (CCJ).

But in reality only 7 per cent of homeowners who had experienced adverse credit before buying their property, said they had a mortgage application declined.

According to Pepper Money, this indicated a significant “perception gap” between the number of people who believe that adverse credit will result in a declined mortgage application, and for whom this has actually been the case.

Where adverse credit did impact a mortgage application, 15 per cent said it had reduced their available mortgage options, and the same percentage thought it had made the process of applying for a mortgage longer.

Additionally, 18 per cent said they were asked to supply more paperwork than normal during the application process, and 10 per cent said they had to pay a higher rate on their mortgage.

What do you think about the issues raised by this story? Email us on to let us know.