Bristol & West has become the first high street lender to offer a self-certification mortgage to adverse credit borrowers, writes Kirstie Redford. The move will allow self-employed people to certify their own income despite having a less than perfect credit history.
The high risk involved in this customer sector has deterred other lenders from offering suitable products, leaving a sizeable proportion of society who have suffered from adverse credit with no means of purchasing a mortgage.
The mortgage provider claims to be taking a responsible view of the situation and states it will only lend to customers who have stabilised or improved their credit level over the past six months. A special team of underwriters has been put in place to look at each case individually and to offer customers post-completion counselling to encourage borrowers to keep up payments.
If customers succeed in making regular payments over a three year period, Bristol & West says it will revert the mortgage to a base rate tracker, standing at just 1.75% over base rate.
Colin McDougall, product manager at Bristol & West’s specialised lending, said: “This offers opportunities to a segment of the population who have so far been denied a mortgage. It is ideal for people, for example, whose business partnership has failed incurring county court judgements, but has now set up a successful business of their own. Or a sole trader who suffered from a long bout of illness so that payments could not be met, but whose credit history is sound.
“We believe that our mortgages are the best value available and that together, with our superb criteria and the excellent service offered by our underwriting team, we provide borrowers with the best opportunity to own their own home and to get back on their feet financially.”
Self-certification adverse products are available from Bristol & West for up to 65% LTV at a variable rate of 8.25%, equal to the base rate tracker plus 0.5%, and a fixed rate of 7.75% for two years.