Buckinghamshire Building Society has launched a mortgage range targeted at those on the fringes of mainstream lending, whose credit scores have been impaired due to various circumstances.
The mutual launched the new range – Bucks Solutions – for individuals it described as having a “less-than-perfect credit history”, but still meet the affordability requirements. The building society added that broadening its criteria in this way is part of a strategy to give “more customers the chance to own their own home”.
The range starts with three level 1 products, for non-standard credit, which comprise a three-year fixed rate mortgage at 3.79 per cent, a three-year discounted product at 3.59 per cent and a five-year discounted product at 3.69 per cent. All three mortgages in this range have both a follow-on rate of 5.24 per cent and a maximum loan-to-value (LTV) of 80 per cent.
Bucks Solutions also comprises a level-two credit repair product, a three-year discounted mortgage available at a 3.99 per cent initial rate, up to 70 per cent LTV.
Finally, a level-three impaired credit product comes with a three-year discount at an initial 4.99 per cent rate, available up to a maximum 60 per cent LTV.
In notes for intermediaries, the lender said it will consider cases with a variety of adverse credit, particularly where a life event has led to a customer’s credit issues, but where there is a good degree of confidence they will service their mortgage well in future.
Reactions
Provider view
Tim Vigeon, head of lending at Buckinghamshire Building Society, said: “This new Bucks Solutions range gives us more opportunities to offer mortgages to people who do not fit the main high street criteria. People who have made mistakes which have affected their credit ratings without them being aware, like late payments that have turned into missed payments, are often penalised by larger lenders.
“Because we do not credit score, but manually assess all our applications we can investigate the reasons for poor credit, and make a fairer and more balanced view of each case.”
Charges
A £999 product fee applies to all five mortgages in this range.
Adviser view
David Hearne, director at Satis Asset Management, said: “It’s great to see new products in the marketplace, particularly for those with impaired credit. Hopefully it offers more choice to existing borrowers who can feel trapped on their current lender’s standard variable rate, or for first-time buyers who can afford to buy, but don’t want to delay doing so while they improve their credit score.
“For anyone trying to improve their credit rating, a fixed term, fixed-rate mortgage can really help with budgeting, hopefully giving them the time they need to improve their credit rating, before returning to the full mortgage market when the term ends.”
Verdict
This new range might go some way to providing an option for customers without a great deal of choice among mainstream lenders. For those impacted by a sudden life event that, in turn, has led to a deterioration in their credit record, it could be a route through to financial rehabilitation.
Marcel Le Gouais is a freelance journalist
