Half of prospective homebuyers with adverse credit would still consult a mortgage broker, a recent study reveals.
- This marks a decline from previous data, where 58% of such buyers sought broker advice.
- Recommendations from social networks remain critical, with 47% relying on family and friends, and 46% on online research.
- Access to exclusive lending options and competitive rates are primary motivators for seeking broker services.
- Preferences in advice delivery and payment options for broker services vary significantly among buyers.
According to the Pepper Money Specialist Lending Study, only 50% of potential homebuyers with adverse credit issues would consult a mortgage broker for advice on obtaining a mortgage. This represents a decrease from a previous study where 58% expressed a willingness to seek broker guidance.
The study highlights that social networks play a significant role in broker choice, with 47% of homebuyers relying on recommendations from family and friends. Additionally, 46% of potential buyers make their decisions based on online research. These figures underscore the influence of personal networks and digital platforms in shaping homebuyer decisions.
For those seeking advice, the main motivation remains access to lenders not directly available to consumers, with 67% of respondents citing this reason. Furthermore, 64% of buyers are driven by a desire to find the best market rate available. This illustrates the critical role brokers play in navigating a complex financial landscape to secure favourable terms.
The study reveals that face-to-face interactions are preferred by 59% of customers seeking mortgage advice. Meanwhile, 58% favour email communication, followed closely by 50% who prefer telephone advice. These varied preferences indicate a demand for flexible communication methods tailored to individual needs.
Regarding payment for services, nearly 38% stated their choice of broker would depend on whether a fee is charged. While 27% of respondents prefer brokers who do not levy a fee, 22% remain uncertain, and 13% are willing to work with fee-charging brokers. Rob Barnard, director of intermediary relationships at Pepper Money, notes the importance of professional advice, particularly for those with adverse credit, and the growing acceptance of service charges as part of the advisory process. This diversity in payment preference suggests varying perceptions of value in broker services.
Kate Fuller, business principal at Mortgage Advice Bureau, emphasises the pivotal role brokers play in handling substantial financial commitments such as mortgages. She suggests that, while half of those surveyed indicated a willingness to consult a broker, the expectation should be higher. Her comments highlight the ongoing importance of intermediary services in the mortgage acquisition process and the potential for increased engagement in the future.
The study underlines the need for brokers and lenders to enhance their outreach and support for buyers with adverse credit histories.
