Vernon Building Society has introduced a new Credit Repair mortgage range aimed at borrowers whose credit profiles fall just outside prime, offering a structured route back to mainstream lending.
The mutual said the range is designed for applicants who have experienced historic credit issues but are now in a stable financial position.
Sitting between prime and impaired credit, the products are intended to provide a pragmatic option for more complex cases, with pricing positioned closer to the mainstream market than traditional sub-prime lending.
The launch includes three products available for both purchase and remortgage. These comprise a three-year discounted rate at 5.16% up to 85% loan-to-value with a £499 fee under Tier one criteria, a three-year fixed rate at 5.29% up to 85% loan-to-value with a £999 fee under Tier one, and a five-year fixed rate at 5.49% up to 80% loan-to-value under Tier two, also with a £999 fee.
The products sit alongside updated lending policy criteria and introduce a new two-tier structure above the society’s standard prime offering. Tier two is designed to accommodate more severe or more recent historic credit issues than Tier one, allowing underwriters greater scope to assess cases on their individual merits.
CREDIT REPAIR CRITERIA
Under the Credit Repair range, the Vernon will consider a wide spectrum of previous credit issues on a case-by-case basis. These include arrangements to pay, missed payments on consumer credit, loan and mortgage arrears, payday loans, defaults, satisfied county court judgments up to £500 within the last 36 months, active or recently satisfied debt management plans, and historic individual voluntary arrangements, bankruptcy, debt relief orders or repossessions.
The society said different levels of consideration apply under each tier, giving intermediaries clearer pathways for placing cases that do not meet prime criteria but fall short of specialist adverse lending.
Following the initial product period, borrowers who maintain their payments will have the option to move onto the Vernon’s standard product range, creating what the society describes as a structured pathway back to mainstream lending.
Brendan Crowshaw (pictured), head of mortgage and savings distribution at Vernon Building Society, said: “Credit challenges are no longer a niche issue. We’re seeing more applicants with some form of historic blip on their record, from younger buyers and the self-employed through to those who have simply had a tough few years financially.
“Traditional lenders can be reluctant to look beyond those facts, even when an applicant’s current situation is strong.
“Our Credit Repair range is designed to bridge that gap, combining realistic, clearly defined criteria with common-sense underwriting to help brokers get good quality clients the home they deserve.”
