Foundation Home Loans has made a series of changes to its residential mortgage product range.
Its residential range – aimed firmly at those borrowers who narrowly miss the requirements of mainstream high-street lenders – includes both two and five-year fixed-rate products, from 65% LTV, moving up to 90% LTV for the first time.
A series of criteria enhancements have been made opening up the residential mortgages to more borrowers that just narrowly miss the mainstream/high-street lenders, to those with accidental, historical blips, and to borrowers with credit blips in the last year.
Criteria changes for Foundation’s residential range include:
- Missed credit card payments are no longer considered as separate – Foundation will now view missed payments on credit cards alongside simple communication blips and other revolving credit.
- Borrowers with one unsatisfied CCJ (maximum £200) more than 24 or 12 months old can access their ‘F2’ and ‘F3’ product ranges.
- Defaults up to £250 on telecommunications, utility bills and mail order will now be ignored.
The lender has also sought to simplify its residential mortgage application process by asking for fewer documents and reducing reference requests: it no longer requires bank statements for all cases, only in selected scenarios.
Foundation has also increased its maximum loan sizes across all LTV bands – previously it would only lend a maximum of £750k regardless of LTV, whereas now it lends up to £2m at 65% LTV and a maximum of £500k for borrowers seeking 90% LTV mortgages.
The lender has fixed rates starting from 2.59% (two-year, 65% LTV) up to 4.19% (two-year, 90% LTV), within its ‘F1’ (near mainstream) product tier, plus specific two-year and five-year products for ‘F2’ and ‘F3’ borrowers. It also offers a range of two- and five-year first-time buyer products, again up to 90% LTV for F1 borrowers.
Jeff Knight, director of marketing at Foundation Home Loans, said: “We believe there are a growing number of borrowers who might best be described as ‘mainstream misses’ – essentially clients who, for any number of reasons, don’t meet the criteria requirements of the larger, high-street lenders.
“Our residential offering is aimed at firmly at these borrowers and, as long as they don’t have mortgage arrears in the last 36 months, Foundation has the residential product range which should satisfy advisers and their clients’ needs.
“We’ve introduced a number of criteria enhancements designed to make life as easy as possible for such clients, and to broaden our offering to ensure that credit-worthy borrowers – who might just have some historical credit blips – can still secure competitively-priced mortgage finance.
“That means we are now lending at 90% LTV for the first time, plus we’ve increased our maximum loan size to £2m, and we’re requesting less documentation, depending on individual circumstances. We’re also assessing missed credit card payments alongside revolving credit, and allowing one unsatisfied CCJ and ignoring certain defaults under £250.
“These minor credit blips may push certain borrowers outside the ‘norms’ of the mainstream lenders, but we believe they are still very much credit-worthy and we have the overall product offering, criteria and service to ensure they get the mortgages they deserve.
“Prices have also changed across the range, and we would urge those advisers with clients who have these types of credit blips to contact their regional or telephone BDM to see how Foundation can support them.”