Research also finds a 'significant emotional penalty' on those outright rejected
Over half, or 53%, of borrowers with a credit blip have faced challenges in getting a mortgage, rising to 86% of those aged 18 to 34, the latest research from specialist lender Together has found.
Of those who have had their mortgage application rejected, a fifth, or 20%, could not secure the mortgage they needed in time while 16% gave up on purchasing altogether.
About a quarter, or 23%, relied heavily on family and friends to act as a guarantor, while 17% drained all their savings just to be able to buy with a cash deposit.
The research commissioned by Together and conducted by insights agency Opinium also revealed that there was also a significant emotional penalty for those outright rejected. Among those who had been turned down, 32% said the result left them feeling worried for their future, while 26% stated it made them depressed and a further 23% said they felt like a failure.
“Our research clearly shows there is a trend in mortgage applicants, particularly among the younger demographic, continually facing issues securing mortgages due to having CCJs, or blips on their record,” James Briggs (pictured), head of personal finance intermediary sales at Together, said.
“As the cost-of-living crisis puts more pressure on people’s finances, we know the proportion of applicants in this category is only set to rise – opening them up to possible rejection should they try pursuing a high street mortgage.”
Briggs added that home movers or first-time buyers looking for advice about the finance needed to purchase a property should be confident in approaching brokers, despite having a blip on their record.
He also pointed out that while the risk appetite and criteria of high street lenders continues to tighten, specialist support where people’s finances are treated on a case-by-case basis may offer a solution.
“They should feel encouraged that there are specialist lenders, who are best positioned to support these cases, rather than the automated approach of high street banks,” Briggs said.
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