According to research from Bluestone Mortgages, which surveyed around 2,000 adults, there is also a lack of awareness of government-backed support services, debt advisers and local council support.
The report added that around 24 per cent were concerned about mortgage repayments but said embarrassment and lack of awareness of support were major barriers.
The figures show that one in six people are too embarrassed to seek financial support if they need it, whilst 31 per cent don’t think they would be eligible for support.
Around 22 per cent say they wouldn’t know where to start in terms of looking for support and 11 per cent are worried about the impact on their credit score if they sought such help.
‘Needs to be greater emphasis on education’
Satnam Sidhu, mortgage expert at Haysto, said that advisers played a “very important role” for those that were embarrassed about their financial situation.
He continued: “The first task is to create a non-judgmental and safe place for the customer to discuss any life experiences and credit issues. Doing this reduces the embarrassment and anxiety levels and helps focus on what the customer wants to achieve.”
Sidhu noted that there needed to be a “greater emphasis on education across the industry to help increase financial awareness amongst individuals”.
“Many people do not understand the impact of defaults, county court judgements (CCJ) or debt management plans on their ability to obtain a mortgage. At Haysto, we strive to address this issue by providing support for individuals so they know and understand their circumstances and options before making any decisions,” he explained.
‘Early engagement is key’
Steve Seal (pictured), CEO of Bluestone Mortgages, added: “As the cost of living crisis continues to intensify, we expect to see a growing cohort of customers locked out of the mainstream mortgage market as they do not fit the “vanilla” criteria.
“For those who find themselves in this situation, it’s important to remember that there is help at hand and early engagement is key. While many customers may be embarrassed to speak about the state of their finances, the earlier they can engage, the more tailored support they will receive.”
He continued: “Whether that be support directly from the lender, or being signposted to a debt adviser who can help them get their finances back on track, it’s important that we, as an industry, highlight the support options available so that we can deliver a fair customer outcome which takes into account a borrower’s individual situation.”
