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Mar 04

Don’t be embarrassed to get bad credit mortgage advice

Reading Time: 4 mins

New research raises the possibility that prospective homebuyers may be reluctant to ask for professional mortgage advice because of fears of being judged for their previous financial; behaviour.

Research carried out by YouGov for specialist adverse credit mortgage brokers Simply Adverse, revealed that 65% of those asked felt that seeking advice or information about ‘bad credit’ mortgages would lead to them being judged on their previous financial behaviour.

‘Bad credit’ mortgages is a term used to describe those mortgage or remortgage products specifically designed for people with a history of adverse credit. A poor credit history may be the result of being made bankrupt or having CCJs but could also indicate something as seemingly minor as a missed credit card payment.

Many people don’t even realise they have a poor credit history until they are declined credit, and with Simply Adverse’s research showing that over 9 million UK adults have had at least one application turned down, that could equate to an awful lot of people who are reluctant to speak to someone about their circumstances.


Where are people looking?

The research showed that half of respondents would look for advice or information on online forums. That’s more than would speak to a specialist adverse credit mortgage adviser, although if we look at another of the study’s findings, we might get a clue as to why this is.

Two thirds of the people asked said they would prefer to remain anonymous when seeking advice, a major benefit of going online to look for information. But using online forums for such important advice is not without its problems.


Does it matter?

It’s always valuable to search for information on what your options might be if you are looking for a mortgage. However, if people are relying on online forums for that information in place of talking to a professional advisor they may become unstuck.


What are the problems with online forums?

We’ve already seen how people would prefer to remain anonymous when they look for information about bad credit mortgages. In addition, it can be very reassuring to speak to people who are in a similar situation to you, particularly when they have resolved their problems. So using an online forum to ask people who have had debt problems how they managed to find a mortgage can seem very attractive. But what makes an online forum appealing, may also be part of the problem.

  • Anonymity

You’re anonymous, but so is everyone else. This means it can be difficult to judge what the motives of anyone posting advice might be. Most people are undoubtedly posting in order to help others. But how would you know? They could be touting for business, particularly if they try to direct you to another site. You also have no idea what qualifies them to give advice. There are generally no safeguards on online forums to ensure that information is accurate.

  • Is the information current

Even if the information that someone gives you used to be accurate, the mortgage market is extremely fast-moving. Lenders’ criteria for example frequently change, so you may find that you are given information that is no longer of use to you.

  • The answers you get will only be as good as the questions you ask

What do we mean by that? Well, even if the information you receive is accurate and up to date it may not really be the information you need.

Let’s say you are looking for a mortgage, but you haven’t yet got your finances and credit history in order. A professional who spent time talking to you would spot that and may recommend some changes to mitigate certain problem before you apply. In extreme cases they may advise you to seek debt management advice before you even think of making an application. They will dig more deeply, ensuring you take the right route for you.

  • You are an individual

Ultimately any information you receive can only give you a general idea of what your options may be. Everybody’s circumstances are different, and what applies to someone else is unlikely to apply to you.

This of course works both ways, so if you are feeling disheartened because you keep reading about people with a poor credit history having their mortgage applications turned down, don’t give up hope.  Working with a specialist broker who takes a good look at your situation will help you find the best deal.


Should I avoid online forums altogether then?

It’s fine to use online forums as long as you bear in mind the possible pitfalls. Don’t take advice at face value and always be aware that what worked for someone else may not work for you.

Alternatively look for a bad credit mortgage forum that is backed by a professional, FCA regulated mortgage broker. Look at how the forum is moderated and check whether they will remove any inaccurate information, as this will act as a safeguard. If you know who is running the forum and who is giving out specific information this at least gives you a much greater level of transparency than if you are unsure who is posting.

Online forums can provide you with a great first step when you are not feeling confident enough to approach a specialist broker directly. But remember, in the end you will need to speak to someone on a one-to-one basis, and they won’t judge you, so when you’re ready there is no reason to feel embarrassed.

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6 months ago

Sound advice for anyone in this situation.

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