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Magellan opens criteria to ‘messy payers’

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  • 14/06/2017
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Magellan opens criteria to ‘messy payers’
Magellan Homeloans has overhauled lending criteria across its entire complex prime and credit repair product range, including extending its loan size and debt to income ratio.

The lender also noted it had made significant investment in its systems and would be announcing upgrades in the near future.

Magellan Homeloans managing director Simon Read (pictured) told Mortgage Solutions it had made the criteria changes in a bid to be “more detailed and transparent” about what varying situations it could consider.

“Some customers fit our criteria but there were other parts to their profiles which meant in theory we would not lend to them, but actually once we considered their applications we could,” he said.

“So we have been open in what we can look for,” he added.

 

Key changes

One of the key changes is to consider customers with “recent small credit challenges” on their record.

“I often term these borrowers as just messy payers,” Read continued.

“There’s nothing structurally underlying wrong with them, they’re just always late paying and it might be they’ve got complicated incomes or they are not great at managing their debt. They do always pay it, it’s just not always on time,” he added.

The maximum loan size it will consider has been raised to £750,000 while the debt to income ratio for high earners has been lifted to 40% from 35%.

“We’re being a bit more flexible for borrowers where they can show they’ve got disposable income,” Read added.

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