The networks include Sesame, Intrinsic, IN Partnership, Pink Home Loans, First Complete, Homeloan Partnership, Mortgage Advice Bureau and The Whitechurch Network.
The service is aimed at adverse credit borrowers over the age of 25, which it describes as ‘disenfranchised’ by traditional high street lenders, but who have retained a clean credit record for the last 12 months.
Borrowers will need to provide a fully documented adverse credit explanation (ACE) and affordability will be rigorously stress tested on a capital repayment basis, said the new lender.
Magellan is offering borrowers a choice of five products, each accommodating different levels of credit impairment depending on the loan-to-value ratio. The maximum LTV is 75% and all products have the same pricing of 8.55% (LIBOR + 8.00%).
The loans will be available in England and Wales for purchase or remortgage up to a maximum of £400,000 including debt consolidation. Borrowers must have a minimum income of £25,000.
The range will be available to employed, self-employed and first-time buyers. CCJs, missed secured or unsecured payments, defaults, bankruptcy orders, individual voluntary arrangements and debt management plans will be considered subject to an ACE.
All applications will be manually underwritten with no credit scoring and a completion fee of 1.5% completion fee, or a minimum of £995, will be applied alongside a sliding scale of application fees determined by property value.
No early repayment charges will be applied to loans, allowing borrowers to repay loans more quickly with no penalty.
The seasoned management team includes Matt Gilmour, co-founder and CEO of Infinity Mortgages and co-founder and former CEO of Unity Homeloans, both non-conforming UK residential mortgage lenders. Clive Willson has also joined the team as sales director at Magellan, formerly the sales and marketing director of Beacon Homeloans and head of sales at Future Mortgages.
Gilmour, co-managing director, (pictured) said: “Magellan Homeloans is opening-up a new route to home ownership by making mortgages available to borrowers who can demonstrate they have regained control of their financial affairs.
“Our philosophy is that we understand people hit difficult patches which can lead to financial problems. What’s important to us is the applicant’s ability to explain their difficulties and demonstrate how they have been able to restore financial stability so they can now afford a mortgage.
“In our opinion, a short-term financial wobble should not preclude borrowers from mortgage finance on a long-term basis. We’re delighted to be piloting a new proposition which gives credit impaired borrowers a real chance to obtain mortgage funding once again.”
Willson, sales director at Magellan Homeloans, said: “All applications will be individually underwritten and assessed by our team of underwriters here at our head office in Leatherhead. We will also manage all post completion administration in-house; none of the client management will be outsourced.”
Co-managing director Alex Forrester and former MD of non-conforming mortgage lender Victoria Mortgages and ex-investment banker also joins the team.
The Select Partnership has been appointed as a distribution partner offering access to the ARs of both Intrinsic and First Complete and Brightstar Financial is set to support adviser applications from Mortgage Advice Bureau and Intrinsic.
Rob Jupp, CEO of Brightstar Financial said: “We have been pushing for some time for help for people who have suffered financially through redundancy, bereavement or loss of their businesses and for whom the high street is not interested because the credit score is king. I think understanding is dawning that leaving so many people with previously unblemished records out in the cold needed to be addressed,” said Jupp.
