Vernon Building Society has launched a new Credit Repair mortgage range designed to help borrowers who have experienced historic credit issues.
Sitting between prime and impaired credit, the products aim to offer a further option for complex cases, with pricing that remains closer to the mainstream market than traditional sub-prime.
The new products align with updated lending policy criteria and introduces a new two tier structure above the Vernon’s standard prime criteria, depending on the extent of previous credit problems. Tier 2 can accommodate more severe or recent historic issues than Tier 1.
The range comprises of three products available for both purchase and remortgage. For Tier 1, a three-year discounted product is available at 5.16% up to 85% LTV with a £499 fee and a three-year fixed rate has launched at 5.29% up to 85% LTV with a £999 fee. A Tier 2 five-year fixed rate of 5.49% is available up to 80% LTV with a £999 fee.
The Credit Repair criteria enables the Vernon to take a flexible, case by case view across a wide range of previous credit issues, including arrangements to pay, missed payments on consumer credit, loan and mortgage arrears, payday loans, defaults, satisfied CCJs up to £500 in the last 36 months, active or recently satisfied debt management plans, and historic IVA, bankruptcy, DRO or repossession. Different levels of consideration apply under each tier, giving intermediaries clearer routes for placing cases that fall just outside prime.
After the initial product period, borrowers who have maintained their payments will have the option to move onto the Vernon’s standard product range, supporting a structured pathway back to mainstream lending.
The new product offering follows the recent launch of Vernon's range of professional mortgages aimed at young professional homebuyers.
Brendan Crowshaw, 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.”
