The growing adverse credit market

Dilpreet Bhagrath

November 20, 2019

Dilpreet Bhagrath (pictured) is mortgage expert at Trussle

Today’s adverse credit market is on the rise. Almost one in five adults (15%) have experienced credit problems in the past twelve months.

And on top of that, estimates show that 1.26 million people with adverse credit will be looking for a mortgage in the next year.

Despite the growing demand for mortgages from those with adverse credit, it can be a much more difficult process. Some high street lenders tend to accept credit scores that will decline customers with adverse credit.

Meanwhile, specialist lenders’ lending policies can be inconsistent, so it can be tricky to source a mortgage. As a result, adverse credit customers often turn to specialist brokers, but with this comes additional fees.

A broker will typically spend more time helping a mortgage applicant with adverse credit, than those with relatively common circumstances, as there’s a few extra things that need to be covered.

This includes reviewing each applicant’s credit report and asking extra questions for more detail.

Mortgage brokers often need to spend more time with the lender liaising and discussing the case in order to secure the most suitable deal.

With this in mind, it’s a positive step to see industry players starting to make movements to better serve those with adverse credit in the mortgage market.

In an outdated industry that’s exasperated with unsuitable mortgage products, unnecessary costs, and a lot of confusion, this is a progressive move.

At Trussle, we’re committed to making mortgages fairer. We provide free mortgage advice to all current and future homeowners.

And we’ve recently introduced a specialist team, to enable more dedicated support for customers including those with adverse credit.

Having a dedicated team enables those advisers to spend adequate time exploring all avenues and find the borrower a suitable mortgage. Being able to look for mortgages from a wide range of lenders means that we can often find mortgages for those who may have previously been rejected.

Our Mortgage Monitoring Service monitors mortgage deals on the market every day and alerts customers when there’s a better deal available.

Given the higher interest rates that are often associated with adverse credit mortgages, this ensures we can let these customers know when they could save money by switching, taking into account any early repayment charges.

But there’s more that can be done by the industry to ensure that this under-served group is adequately supported by the mortgage market.

This includes ensuring the right communication is in place to support these customers through the process.

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