Growing number of specialist lenders help borrowers with credit problems
The mortgage market has become more challenging over the last year for borrowers with previous credit problems, according to the Mortgage Search Tracker from Mortgage Advice Bureau.
The percentage of customers citing past credit difficulties when searching for a purchase mortgage dropped from 3 per cent in the first quarter to less than 1 per cent in Q1 2015.
There was an even bigger shift among remortgage customers, where the percentage reporting past difficulties dropped from 6 per cent to less than 1 per cent over the same period.
This trend suggests that fewer customers with past difficulties have been motivated to seek a new loan since the Mortgage Market Review (MMR) took effect in Q2 2015 – or that those in this situation are less inclined to disclose an imperfect credit history when investigating a mortgage deal online.
However, as head of lending at Mortgage Advice Bureau, Brian Murphy, explains, more specialist lenders are beginning to enter the market.
He explains: “The MMR rules certainly make some types of borrower search harder for a deal to suit their needs and personal circumstances. But many borrowers can take comfort from the growing number of specialist lenders on the market which has boosted the product range.
“These new lenders operate safely within the affordability rules, and are often more willing than some mainstream brands to cater for people with an acceptable blemish on their credit record.”