Credit Impaired Mortgage Products Soar by 167 in Q2

28-6-2017

Credit impaired mortgages are starting to make a comeback, with the

number of deals increasing by 167 products in the past quarter.

 

The data from Moneyfacts shows that the number of credit impaired mortgages rose from 527 in March 2017 to 694 today.

  Charlotte Nelson, Finance Expert at Moneyfacts, said: The economic downturn caused financial difficulties for many, and while their situation may have improved since then, this is still having a knock-on effect on their ability to borrow with a mainstream lender. As a result, many alternative providers have entered the fray, offering mortgages to those with poor credit histories.

The boost in products can largely be explained by the increased positivity in the mortgage market and the general rise in house prices. However, the market has learned from the past, which means stricter rules are now firmly in place, with many of the lenders offering these deals looking more in-depth into a borrower's history. As is to be expected, the cost of these deals can be significantly higher than standard deals in the market, reflecting the extra risk that is involved. For example, the average two-year fixed adverse credit rate stands at 4.39% today, which is a whopping 2.12% higher than the standard average two-year fixed mortgage rate."

  Source: www.financialreporter.co.uk 26/06/2017

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