One of the many consequences of the ongoing rises in everyday living costs is that mortgage advisors are encountering more clients with credit issues.
There has been a 6% rise in the number of CCJs against people for debts this year compared to 2023. The debt value against consumers also rose by 11% during that period, so how can advisors use their CeMAP training course knowledge to help clients with bad credit?
Well, one thing that can be done is informing those who come to them for advice about types of mortgage product suitable for people in their situation. A scheme like the Deposit Unlock one enables those trying to buy for the first time to do so with a deposit of just 5%. Then there are product transfers, which could be a solution for some who have a less than perfect credit history.
Where these differ from remortgages is in having less onerous affordability criteria. Since the current lender already knows that the client is meeting repayments, assessing affordability is kept to a minimum and credit history is therefore less likely to be flagged up as a problem.
It is not just a matter of identifying products for clients with credit history issues though. Research has found that 29% of people in those circumstances do not seek out an advisor due to embarrassment. The same percentage avoids getting help because they have no idea where to start. Therefore, mortgage advisors need to be a lot more proactive in promoting their ability to help.
