Mortgage customers with bad credit relying more on mortgage brokers

According to a recent report many mortgage customers with damaged credit ratings are now relying on brokers in order to help them to find a lender that will accept them for a mortgage deal.

Officials from the Financial Services Authority claim that many bad credit mortgage customers are now going straight to mortgage brokers rather than shopping around for a mortgage.

However, the FSA has stated that whilst these borrowers may be grateful for getting any sort of mortgage deal, many may not be getting the best deal by failing to shop around.

The FSA report went on to state that many people within the sub-prime market, which comprises those with bad credit, may be looking more at short term affordability rather than at how good a deal they are getting over the long term.

The report goes on to state that sub-prime customers tend to rely on the information provided to them by mortgage brokers, and assumed that they would not be steered in the wrong direction by brokers, thus not bothering to check deals for themselves.

Sub-prime customers are also reliant upon information regarding the risks of taking out a mortgage from their mortgage brokers, according to the report.

The report also showed that the main consideration for sub-prime customers was to find the cheapest deal possible.

In the current financial climate, where many lenders have tightened up on their lending criteria, many consumers may assume that they cannot find a mortgage deal for themselves if they have bad credit.

Consumers that are looking for a bad credit mortgage are urged to hunt around and compare different deals from a range of lenders in order to try and get the best deal on their mortgage borrowing, although the number of deals available to sub-prime customers has dropped over recent months as a result of the global credit crunch.