According to the lender, the two new tiers mean the Bank can now consider customers if they have CCJs or defaults registered over six months, bankruptcy or IVA discharged for two years, mortgage or secured loan arrears over three months ago, or forced or voluntary possessions older than three years.
Level 2 will offer rates from 4.78% and level 3 from 5.28%, both available up to 75% LTV with free standard valuations.
Aldermore’s First-Time Buyer Index revealed that 35% of prospective 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 data found that 13% have had credit card debt in the past, 12% have missed bill payments and 7% have taken out payday loans. 6% have had accounts handled by collection agencies, 4% have CCJs on their record and 3% having declared bankruptcy in the past.
Damian Thompson, director of mortgages at Aldermore, commented: “The average first-time buyer is 31 years old 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.”
