Underserved customers fail to apply for home loans: Bluestone

According to Bluestone Mortgages, about 42% of people generally underserved by lenders don’t even apply for a mortgage, despite describing their situation as financially secure.

The report finds that among those often underserved in the mortgage market – the self-employed, those with poor credit history or none – around 26% have not tried buying a property ladder for fear of rejection. .

It says 23% didn’t attempt to buy a home because of the pressure the application process would bring, while 23% worried about the impact their mortgage application might have on their mortgage score. credit.

The survey says this comes at a time when 78% of those who have traditionally struggled to get a mortgage would describe their financial situation as secure. She adds that only 22% of respondents described their financial situation as “unsecure”.

The report adds that “the challenges faced by these respondents extend beyond the mortgage sector as well.”

He revealed that 48% of respondents say they have fewer financial choices than others because they don’t meet the “vanilla”, or near-perfect, criteria they believe traditional lenders hold.

Another 46% believe that financial organizations do not understand their situation, this figure jumps to 85% among those who have missed a payment that has affected their credit score.

Bluestone Mortgages managing director Steve Seal said: ‘It is concerning that so many people in the UK have made a conscious decision not to apply for a mortgage for fear of rejection, despite being in a financially secure position.

“It’s the result of people with different financial circumstances being negatively labeled and deemed ‘impossible to lend’ by the traditional mortgage market.

“Going forward, we will see a growing cohort of people who do not meet traditional loan criteria due to the financial impact of Covid-19 and the rising cost of living, and it is essential that these people don’t give up on their dream of home ownership when the computers of traditional lenders say no.

“It is important to remember that there is help at hand and this is where the specialist lending market has a crucial role to play.

“Through their one-on-one approach to underwriting, these lenders can assess clients on a case-by-case basis and provide them with the opportunity to move up the housing ladder.

“However, many people are often unaware of the options available to them, especially if they have been turned down. It is therefore the responsibility of high street lenders to steer these customers towards the options available, to ensure that they can make their dream of home ownership a reality.

Bluestone Mortgages commissioned data group Opinium to conduct this survey between December 2 and December 9, 2021 among 1,003 UK adults who were either self-employed, low credit score or no credit score.

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