Many potential homebuyers with adverse credit are hesitant to consult mortgage brokers, with only half opting for this advice route.
- This figure is a decline from previous years, where 58% were open to broker consultations, indicating a shifting trend in homebuyer behaviour.
- Family and friend recommendations are the leading ways prospective buyers find brokers, surpassing online research slightly.
- Access to lender-exclusive deals is the main reason buyers seek broker advice, with getting the best rate being a close second.
- There is a divide on paying broker fees, with opinions closely split between preference for fee-less services and acceptance of charges for independent advice.
In recent findings from the Pepper Money Specialist Lending Study, only 50% of potential homebuyers with adverse credit are inclined to seek guidance from mortgage brokers. This marks a decrease from a previous figure of 58%, reflecting a shift in the approach of such buyers towards securing mortgage advice.
Peer recommendations are the primary method for locating brokers, with 47% of participants relying on family and friends, while 46% turn to online research. The reliance on personal networks over digital means may highlight trust issues with online information regarding mortgage brokerage.
The main motivator for using a broker is the access to deals unavailable directly to customers, noted by 67% of those surveyed. Closely following this is the pursuit of the best possible market rates, emphasising the importance of financial optimisation for these buyers.
Diverse preferences exist concerning communication methods, with 59% of borrowers favouring face-to-face interaction, 58% preferring email, and 50% finding telephone contact most convenient. This variation underscores the need for brokers to offer multiple contact options to cater to client preferences.
When it comes to payment for services, 38% of respondents are conditional, basing their decision on the broker’s stipulations. Meanwhile, 27% prefer working with brokers who forego fees, whereas 13% are inclined towards paying for what they perceive as more independent advice.
Rob Barnard of Pepper Money noted a rise in consumer confidence, with 1.76 million people with adverse credit aiming to purchase property in the coming year. However, he acknowledged the challenge for brokers to capture this market, especially with a slight dip in the willingness to consult brokers compared to last year.
Kate Fuller from Mortgage Advice Bureau stressed the importance of professional advice, particularly for those with adverse credit, asserting that while half express a willingness to engage brokers, the real figure of those utilising intermediaries might be higher, nearing 85%. This sentiment reflects the critical role intermediaries play, even if not the initial choice, in the mortgage arrangement process.
The findings illuminate the complexities and varied preferences among adverse credit homebuyers, underscoring the pivotal role of mortgage brokers in navigating the mortgage landscape.
