This content is for intermediary use only. If you're a mortgage customer, please

click here.
Mortgage Intermediaries

Backing more of your clients to go for it

Mortgages 3 min read 10/06/2024

The relaunch of our level two and three product ranges means we offer more mortgages to more borrowers, says Nicola Goldie, head of strategic partnerships & growth at Aldermore.

You want to do the best for all your clients, especially those with non-standard circumstances that are more difficult to place. At Aldermore we’re ready to help you.

We relaunched our level two and three mortgage ranges last month on top of our existing level one products.

The three levels are designed to fit customer credit profiles, with criteria that support borrowers otherwise excluded from the mortgage market. This includes the self-employed, first-time buyers with modest deposits and those with an adverse credit history, or a combination of all three.

More opportunities to say yes

As a specialist lender, we already support those underserved by the mainstream market. But our new range allows us to say yes to more clients with credit problems, even at high LTVs. We spent time looking at customer needs in this space, working side-by-side with brokers to get detailed feedback, which helped us design the proposition.

Borrowers are more diverse than ever. They work for themselves, have more than one income stream, experience life’s ups and downs and sometimes fall into financial difficulties. Many aspiring homeowners also struggle to save a deposit and access the mortgage they need.

We looked for a solution that fits customers’ needs now and considers their potential. We’re one of very few lenders to be able to offer up to 95% LTV. This allows us to help more of your clients, some with adverse credit, while considering applications in a responsible way.

What we offer

Level one

  • Up to 95% LTV
  • CCJs and defaults don’t need to be satisfied if none recorded in last 36 months
  • IVAs and Trust Deeds accepted if discharged for three years

Level two

  • Up to 95% LTV
  • Two unsecured loan arrears in last 12 months accepted if latest month up to date
  • Mortgage loan arrears, CCJs and defaults accepted (if none in 18 months)
  • IVAs and Trust Deeds accepted if discharged for two years
  • Bankruptcy, Sequestration and Debt Relief Order accepted if discharged for six years

Level three

  • Up to 80% LTV
  • Mortgage loan arrears, CCJs and defaults accepted (if none in last six months)
  • Three missed unsecured loan payments in 12 months accepted (if the applicant is currently up to date)
  • IVAs and Trust Deeds accepted if discharged for one year
  • Bankruptcy, Sequestration and Debt Relief Order accepted if discharged for three years

We also ignore all combined CCJs and defaults up to £300 per applicant, and all communication defaults across all our levels of criteria. Plus, we’ll consider debt management plans if satisfactorily maintained for 12 months.

Meeting your clients’ needs

In the week following launch, we saw a huge increase in DIPs. Normally a proposition launch takes a few days to land, but this uptick was immediate from day one, highlighting the clear need for these products. Plus, broker feedback has been fantastic.

We have just completed a case with a couple of first-time buyers from Banbury. The husband has a £20,000 default outstanding which was registered 20 months ago within a current debt management plan, that’s been maintained for a year. We listened to their story and learnt that a cancer diagnosis and almost 18 months off work took its toll financially. Thankfully, he’s now doing well and both partners have full-time jobs, but they couldn’t get a mainstream mortgage with their bank because of the debt and their modest 5% deposit. However, we were able to lend them 95% LTV of the value of a two-bed flat under our level two criteria.

We also offered a mortgage to a web design business owner in Wrexham, which is quickly growing. He wanted to use his latest year’s accounts, because they better reflect the position of his firm, to raise capital to expand his business. That’s not a problem, as we understand the nuances of self-employed finances. But a £17,000 default on his car finance following a relationship breakdown was preventing him from accessing mainstream mortgages, despite no further missed payments. We were able to offer a mortgage based on his last 12 months’ earnings, taking into account his detailed business plans and projections.

Examples like this highlight how we help deserving borrowers who fall outside of mainstream criteria because of life events and unpredictable circumstances. That can happen to any of us. And we know you have plenty of great clients like this, who’ve been overlooked by lenders.

One in five UK adults has a poor credit score and we don’t believe anyone should be excluded from home ownership because of a past financial mistake. We provide the competitive rates and trusted service they’d expect from the mainstream with the flexible common-sense approach to underwriting they need from a specialist.

There are potentially millions of people in the UK with historic credit issues who are held back from buying their home or struggling to remortgage. Aldermore will listen to their story and help where we can.

FOR INTERMEDIARY USE ONLY

IF YOUR CLIENT FAILS TO KEEP UP PAYMENTS ON THEIR MORTGAGE THEIR PROPERTY MAY BE REPOSSESSED.

More from Aldermore