Bad credit customers should compare mortgages

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An expert has warned that consumers who compare mortgages recommended by independent financial advisers (IFA) and brokers could find they cannot afford the repayments.

Financial Services Authority (FSA) spokesperson Robin Gordon-Walker claims that sub-prime mortgages are sometimes recommended to customers with bad credit, even if the repayments are likely to be more than they can afford to pay.

"You shouldnt advise someone to opt for a sub-prime mortgage when it is not suitable for them," he states.

"Some [IFAs and brokers] were putting customers in a mortgage where their income would not meet the lenders criteria."

He adds that in 80 per cent of cases, brokers were unable to adequately prove why they had recommended a sub-prime mortgage to a client.

Jeremy Leaf of the Royal Institution of Chartered Surveyors recently warned that affordability is "set to worsen across the board" in light of rises to the base rate of interest.

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