Almost half (46%) of Scots with adverse credit who are planning to buy a home within the next 18 months see a mortgage broker as essential to getting a mortgage, according to new research from specialist mortgage lender Pepper Money, underlining how central brokers have become for borrowers navigating a more complex lending market.
This compares with 29% of adverse-credit borrowers overall and just 17% of Scottish adults as a whole who say the same, suggesting that for many with more complex financial circumstances, a broker isn’t just useful, it’s increasingly seen as a key part of getting a mortgage over the line.
Demand for broker support is significantly higher among people with adverse credit. While 31% of Scottish adults say they want to use a mortgage broker when they next purchase a home, this rises to 41% among those with adverse credit and to 61% among those intending to buy within the next 18 months.
This demand comes against a backdrop of wider challenges facing borrowers with adverse credit. The research found that 42% of people with adverse credit are concerned about securing a mortgage, while the same proportion have concerns about the application process itself. Among non-homeowners with adverse credit, 26% say they were declined on their first mortgage application, compared with 10% of homeowners with adverse credit.
For borrowers with adverse credit who are planning to buy within 18 months, access to lenders who are not available directly to customers is particularly important, with 26% identifying this as a benefit of using a broker, compared with 18% across Scottish adults overall.
Positive previous experiences may also be contributing to this confidence in brokers. Among those asked about their experience of using a mortgage broker, 87% say they had a good experience.
The research also highlights why borrowers value the support brokers provide. Among Scottish adults considering the benefits of using a mortgage broker, the most commonly cited are finding the best rate in the market (36%), professional advice (31%), making the process quicker and easier (29%), and having someone to talk to throughout the process (27%).
Paul Adams, Director of Sales at Pepper Money, said:
These findings show that for customers whose financial circumstances may be more complex, a broker isn’t just a nice to have, it’s often central to getting a mortgage sorted. Nearly half of adverse credit buyers planning to purchase within 18 months told us they see a broker as essential.”
“Brokers provide valuable guidance throughout the application process and, importantly, help customers understand the options available to them. That trust is reflected in the fact that 87% of people who’ve used a broker describe the experience as a good one.”
“The research reinforces the value of the intermediary channel for borrowers whose circumstances may not fit straightforward lending criteria, as well as the role brokers play in connecting customers with lenders and solutions that are appropriate for their individual needs.”
Paul Adams,
Sales Director
at Pepper Money
The findings come as Pepper Money launched its First Charge mortgage proposition in Scotland, expanding its specialist residential and buy-to-let offering through the intermediary market. The lender already has an established Second Charge mortgage business and will support brokers across Scotland with dedicated regional expertise.