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More than half of house hunters fear bad credit will scupper plans – Pepper Money

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  • 16/06/2021
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More than half of house hunters fear bad credit will scupper plans – Pepper Money
More than half of house hunters with adverse credit who would like to buy a home in the next 12 months are concerned their mortgage application will be declined, a survey has found.

 

Pepper Money’s latest adverse credit study revealed that 52 per cent of adults with poor credit fear it will stop them from buying a home.

However, these fears have been dampened since last autumn when 69 per cent said their credit history would hold them back.

The study also found that only 6 per cent of homeowners who did have adverse credit before buying their current property said they were turned down for a mortgage.

Pepper Money says borrowers incorrectly believe that once they have experienced a credit issue they will ineligible for a mortgage for many years.

Three quarters of respondents said they knew what a County Court Judgement (CCJ) was, however, almost a quarter said they thought they would have to wait longer than five years to apply for a mortgage after being registered with a CCJ.

Some mortgage lenders will offer deals to borrowers who have been registered with a CCJ six months ago, however, the further in your past the missed payment, default or CCJ is registered, the lower your interest rate will be.

Paul Adams (pictured), sales director at Pepper Money, said: “This research is a mix of good news and bad news. It’s great that customers with adverse credit are generally more positive about their chances of getting a mortgage. There is, however, still a significant perception gap and areas of misunderstanding about the opportunities that are available for customers with more complex circumstances.

“The good news is that this presents an opportunity for mortgage brokers to help raise awareness and understanding about the options available, and this can help them to reach more customers and build trust.”

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