It will also begin lending on amounts of up to 90 per cent loan to value (LTV) for the first time.
The lender said the changes would help borrowers who “narrowly miss” the mainstream and high street lending criteria get a mortgage.
Criteria changes
Missed credit card payments will no longer considered as separate – Foundation will now view missed payments on credit cards alongside simple communication blips and other revolving credit.
Borrowers with one unsatisfied county court judgement (CCJ) at a maximum £200 and more than 24 or 12 months old can access Foundation’s ‘F2’ and ‘F3’ product ranges.
In addition, defaults of up to £250 on telecommunications, utility bills and mail order will now be ignored and the lender will reduce reference requests.
Increased borrowing
Foundation has increased its maximum loan sizes across all LTV bands and now lends up to £2m at 65 per cent LTV and £500,000 for borrowers seeking 90 per cent LTV mortgages.
The lender has fixed rates starting from 2.59 per cent up to 4.19 per cent within its ‘F1’ product tier which it considers “near mainstream”, as well as specific two-year and five-year products for ‘F2’ and ‘F3’ borrowers.
It also offers a range of two- and five-year first-time buyer products up to 90 per cent LTV for F1 borrowers.
Targeting ‘mainstream misses’
Jeff Knight (pictured), director of marketing at Foundation Home Loans, said that there was a growing number of borrowers who don’t quite meet the criteria of larger, high street lenders due to small blips in their record.
He continued: “Our residential offering is aimed firmly at these borrowers and, as long as they don’t have mortgage arrears in the last 36 months, Foundation has the residential product range which should satisfy advisers and their clients’ needs.”
He added: “These minor credit blips may push certain borrowers outside the ‘norms’ of the mainstream lenders, but we believe they are still very much credit-worthy and we have the overall product offering, criteria and service to ensure they get the mortgages they deserve.”
