Klarna could cost you a mortgage: Home buyers turned down for loans after using buy now pay later deals
Aspiring homeowners are reportedly being turned down for house loans as they have used buy now pay later deals.
Experts now urge borrowers to think twice before using the convenient checkout option from brands such as Klarna.
Mortgage adviser Sabrina Hall, of Kind Financial Services, says a client was rejected after using this type of credit. The decision was overturned.
Mortgage risk: Experts are now urging borrowers to think twice before using the convenient ‘buy now pay later’ checkout option from brands such as Klarna
She says: ‘All lenders view buy now pay later schemes differently. My client was showing many transactions on bank statements and the lender was worried they were living beyond their means.’
A 26-year-old woman also told online magazine Refinery29 she was declined for a mortgage on her first home by HSBC and Barclays due to Klarna use.
Both banks deny they automatically reject clients who use BNPL schemes.
A spokesperson for Klarna says: ‘We will be working with mortgage lenders and brokers to help them better understand how our products work.’
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