Would be homeowners are being locked out of the mainstream mortgage market over minor credit blips, in some cases over just a few hundred pounds.
Recent research from specialist lender Together indicates borrowers are facing problems when applying for a High Street mortgage, simply for using their overdraft, or missing a small credit repayment. 1 in 3 UK adults have had a credit blip on their record in the past, according to the data.
The research shows only just over half were aware of their credit history status before applying for a mortgage, while 14% were unsure of how likely they were to be approved.
This is highest among younger borrowers, with 45% of 18–34-year-olds, 35% of 35–54-year-olds and 16% of 55’s and older being impacted when getting a High Street mortgage.
Together says this highlights a glaring awareness gap. Nowhere near enough potential mortgage borrowers are aware of their credit score, and how it can significantly impact their applications. The company says this is also becoming a much wider issue which is impacting more income brackets.
Together’s own internal data shows an increase of 66% in middle-class borrowers with adverse credit taking out first charge mortgages since 2019, when compared to 2022.
And so far this year Together says 14% of the first charge mortgages it has funded have had credit issues. It adds it expects this to rise amid the ongoing cost of living crisis.
The research reveals that issues with credit are also having a knock on impact to future property plans.
If you are currently considering mortgage options, please get in touch. Initial enquiries are free and no obligation.
Comments