Hinckley and Rugby Building Society Widens Criteria for Adverse Credit Mortgages
If you’ve had credit issues in the past, getting a mortgage can be a real challenge. Many lenders automatically reject borrowers with county court judgments (CCJs), debt management plans (DMPs), or missed payments on credit cards, bills, or loans. However, Hinckley and Rugby Building Society has updated the criteria for its “Credit Flex” mortgage, making it easier for those with adverse credit to secure a home loan.
Catering to a Wider Range of Borrowers
The Credit Flex mortgage is designed specifically for borrowers with adverse credit histories. The updated criteria aim to simplify the underwriting process and extend the product’s eligibility to a broader range of borrowers.
Understanding the New Criteria
County Court Judgments (CCJs)
Under the new rules, the lender will accept up to two CCJs between three and 36 months old, with a total value of £500 or less. However, no CCJs within the last three months will be permitted.
Late Payments
For credit cards, mail order accounts, current accounts, and utility bills, the lender will now accept up to five months of late payments within the last 24 months. Any number of late payments older than 24 months will be considered.
Debt Management Plans (DMPs)
No DMPs should have been registered in the last 12 months, and any previous DMPs must have been satisfactorily discharged before completion. If a DMP was unsatisfied, it must have been “satisfactorily conducted for 24 months,” and the case will be referred to a specialised underwriter.
Defaults
No defaults on utilities, credit cards, or telecoms will be accepted within the last three months. The maximum total value of defaults in the last 36 months is £2,500. Anything above this amount will require further review.
Hire Purchase, Unsecured Loans, and Secured Loans
Up to two months of late payments in the last 24 months, or up to three months between 24 and 36 months ago, will be acceptable.
Payday Loans
No payday loans should have been taken out in the last six months, and the maximum total value of payday loans within the last 36 months is £5,000.
A More Flexible Approach
Christopher Holmes, senior product and proposition manager at Hinckley and Rugby Building Society, emphasised the lender’s commitment to a more adaptable approach. “Most lenders want an applicant’s circumstances to fit one of their mortgages — but our range of flex products are designed to be adaptable to meet the client’s needs,” he said.
Holmes added, “The credit flex mortgage offers an affordable, flexible solution to those with previous credit problems, who are often rejected by mainstream lenders. The enhanced criteria [mean] that more borrowers will be able to access this product and benefit from the society’s competitive rates and high service standards.”
If you’ve faced credit challenges in the past, the updated Credit Flex mortgage from Hinckley and Rugby Building Society could be the solution you’ve been seeking. With a more flexible approach and a willingness to consider a broader range of credit histories, the lender aims to make homeownership more accessible for those who may have been previously turned down.