The changes reflect the fact that credit history does not always tell the whole story, with life events often impacting a customer's credit profile without necessarily defining their current financial position or future borrowing potential.
As part of the changes, we have streamlined our credit tier criteria by reducing the number of tiers to three whilst also widening access for borrowers who are rebuilding their finances and may not fit the requirements of mainstream lenders.
Under the revised criteria, we can now consider unsatisfied CCJs and defaults that were registered more than six months ago, accept Debt Management Plans across our F2 and F3 ranges, and we no longer have limits around unsecured & revolving credit.
The enhancements are designed to give brokers greater flexibility when supporting borrowers with historic adverse credit and reflect our commitment to taking a more rounded view of customers' circumstances through common-sense underwriting.
The criteria enhancements form part of a broader refresh of our residential proposition, which also includes updated loan-to-income limits for higher earners and a number of pricing changes across both our Residential Originations and Product Transfer ranges.
For Residential Originations, we have:
• Implemented the new credit tier criteria and updated LTIs for higher earners.
• Reduced selected F1 two and five-year fixed rates by up to 0.20%, with rates now starting from 5.99%.
• Reduced selected F2 two-year fixed rates by up to 0.15%, with rates now starting from 6.19%.
• Reduced selected F3 rates by up to 0.10% With rates now starting from 6.44%
• Withdrawn the F4 credit tier for new business.
The changes are designed to help brokers place a broader range of specialist borrower cases, particularly those involving historic adverse credit, while maintaining a proposition that reflects current market conditions and borrower demand.
Grant Hendry, Director of Sales at Foundation, commented:
"A credit history rarely tells the complete story of a customer's circumstances. Many borrowers experience life events which can impact their credit profile for a period of time, but that shouldn’t automatically prevent them from accessing mortgage finance in the future."
"These changes reinforce our commitment to common-sense underwriting and taking a broader view of each case. By expanding our approach to adverse credit and recent payment blips, we're giving brokers greater flexibility to support borrowers who are rebuilding their financial position."
"Ultimately, this is about helping more customers move forward on their homeownership journey while giving brokers the confidence that we can support a wider range of circumstances, making mortgages happen."
For intermediaries only
