The initial launch is being piloted exclusively through Brightstar Financial, with a roll-out to Castle Trust’s strategic partners planned over the course of the next three months.
The Credit Recovery range includes five tiers, from lightly impaired through to heavy adverse, including applicants with a history of IVA s and recently discharged bankruptcy.
Rates are available from 6.99%, and Castle Trust will price cases individually based on the credit profile of the customer. The enquiry process will leave a so-called ‘soft’ credit footprint which will not impact on the applicant’s credit score.
Loans are available up to 75% LTV for purchase and up to 70% LTV for remortgage, for terms of one year to three years.
The company claims credit rehabilitation is an important element driver for the new range and Castle Trust will, on request, review a customer’s credit history after 12 months and will offer a new product in a lower risk tier, if the credit position has improved.
Matthew Wyles, group executive director at Castle Trust Capital, said: “Most buy to let investors with an adverse credit history are desperately short of options and we are now launching a fresh new alternative. By offering our unique Credit Review Service after 12 months and by using short dated products which don’t lock customers into high rates as their credit improves, we are making sure this disadvantaged minority is treated fairly”.
Asked whether property investors with adverse credit history should be encouraged to leverage up in the current market, Wyles explained: “We expect the vast bulk of our lending will be on remortgaging existing debt, much of which will be at very high rates. So what we are actually doing is accelerating their rehabilitation by reducing their cost of debt service. This isn’t about seducing customers with existing credit problems to gear up further.”
Rob Jupp, chief executive officer at Brightstar Financial, said: “We are always keen to work with lenders who spot a genuine customer need and take a pragmatic approach to developing the right solution – and the Credit Recovery range from Castle Trust is a fantastic example of exactly that.
“I expect that lots of brokers will have landlord clients on their books with adverse credit who write off their own chances to re-finance or purchase a new property. So, this is a great opportunity to revisit your client base and let them know that there are options available.”