FT Adviser - Uptick in advisers helping financially distressed borrowers
An increasing number of advisers are searching for criteria on behalf of prospective mortgage borrowers who have found themselves in “financial complications” such as ongoing payday loans and even bankruptcy.
Search terms and criteria inputted by advisers via Legal & General Mortgage Club’s SmartrCriteria platform during July recorded a 10 per cent jump in criteria for borrowers with ongoing payday loan agreements.
Aaron Strutt, product and communication director at London mortgage broker Trinity Financial, agreed with L&G’s findings.
He told FT Adviser: “So many borrowers are struggling to get a mortgage at the moment because they have missed payments on credit cards or loans. Most people do not realise how failing to make a payment on time can have such a detrimental hit on their finances and potentially force them to take a much higher rate.
“In many cases it does not matter how big the missed payments are, especially if there are a few of them.”
He added that lots of the lenders have strict acceptance criteria, which means these sorts of borrowers simply won’t qualify when applying for a mortgage.
“Unfortunately they could be feeling the effects of paying higher mortgage rates for a long time.”