You are here: Home - News -

Virgin Money to rework affordability criteria – exclusive

by:
  • 01/04/2016
  • 0
Virgin Money to rework affordability criteria – exclusive
Virgin Money is preparing to revise its affordability requirements to ensure its loan limit for certain customers is brought in line with the rest of the market.

Peter Rogerson, commercial director for mortgage and savings, wouldn’t reveal the precise details of the changes, but said the lender would be adapting its stance towards customers it had previously exercised caution with in terms of its loan limit.

He said: “These are customers who have generally got bigger incomes and relatively low levels of unsecured credit but we haven’t necessarily recognised that they’ve got a different risk to customers who have got lower incomes with higher degrees of unsecured credit. We will change some of our affordability rules to support a group of customers that perhaps we hadn’t offered a big enough loan to, relative to some of our competitors.”

Rogerson said that Virgin would be introducing the changes next week.

“This is all about how we assess income and expenditure and the income multiples we’re prepared to apply to a customer with a certain criteria,” Rogerson added.

“What we’re not doing is rushing up the risk curve or changing the LTV (loan-to-value) mix, it’s all based on sound evidence. We can see that in small pockets there are opportunities to give ourselves a bigger reach and brokers appreciate the fact that we recognise that some customers aren’t quite the same risk we thought they were.”

Rogerson explained that the lender’s relationship with intermediaries had a major influence on how it shaped lending policy. Some 90% of Virgin Money’s lending is generated through the adviser market.

He added that Virgin was “looking at its options” in regard to providing brokers with procuration fees for retention business but had no plans to offer the initiative in the near future.

“Retention as a process is always front of mind, whether we’re going to change our intermediary proposition in that space is determined by the nature of the business at the time,” Rogerson said.

“It’s on ‘a radar’ but it’s not something we have an announcement on today.”

There are 0 Comment(s)

You may also be interested in