- Two new lending tiers introduced across its Help to Buy: equity loan mortgage range
- The extended range highlights Aldermore’s commitment to supporting first time buyers who do not fit the ‘cookie cutter’ mould often required by mainstream lenders
Specialist Bank Aldermore has today announced two new lending tiers across its Help to Buy: equity loan mortgage range, with the aim of supporting more first time buyers.
Available from today:
- Level 2 – rates from 4.78% up to 75% LTV (free standard valuations)
- Level 3 – rates from 5.28% up to 75% LTV (free standard valuations)
According to Aldermore’s First-Time Buyer Index1, 35% of prospective first-time buyers are worried about how their credit rating could impact their home buying chances, with 38% actively taking measures to improve their credit score. The Index shows many prospective buyers have had minor credit blips in their past; 13% have had credit card debt, 12% have missed bill payments and 7% have taken out payday loans. The research also shows a proportion have had larger credit issues with 6% having had accounts handled by collection agencies, 4% having CCJs on their record and 3% having declared bankruptcy in the past.
Chart 1: How prospective first-time buyers are improving their credit rating1
The two new tiers mean the Bank will now consider customers if they have:
- CCJs or defaults registered over 6 months
- Bankruptcy or IVA discharged for 2 years
- Mortgage or secured loan arrears over 3 months ago
- Forced or voluntary possessions older than 3 years
Damian Thompson, Director of Mortgages, Aldermore, comments:
“The average first time buyer is 31 years old2 which means they were starting their careers the same year the global financial crisis began. This group has had to navigate a hugely challenging economic climate so it is reasonable to expect some may have had credit blips, gaps in employment, and even resorted to short-term credit in the past.
“At Aldermore, we understand getting on the property ladder is no easy feat and securing a mortgage can be a cause for concern. We believe that those that have since recovered from credit difficulties in their past should have the opportunity for home ownership. Our human approach to lending enables us to consider each case on its individual merits so we can support those people with a complex financial history or a less than perfect credit score find a home.”
1The figures are sourced from a nationally representative survey conducted by Opinium Research with a sample of 1,501 prospective first time buyers and 502 actual first time buyers, conducted between 5th and 14th November. The sample was restricted to GB adults who were students or in work.
2 Based on industry data from UK
Chart 2: Credit rating issues of prospective first-time buyers
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