UCB Home Loans, a specialist intermediary lender, is to enter the adverse mortgage market, with self-certification adverse loans of up to 85 per cent loan-to-value (LTV) ratio and status adverse loans of up to 90 per cent LTV.
The 'Extra Light Adverse' will service borrowers with up to £1,000 in past County Court Judgements (CCJs) or defaults and up to one month's arrears in mortgage or rent.
The 'Light Adverse' meanwhile will accept £3,000 in CCJs and three months' arrears.
The UCB products will serve customers with a poor credit history often excluded by commercial lenders.
But the products do stipulate that no customer in arrears within the last three months will be considered.
UCB emphasises that it "will not be offering medium and heavy adverse loans to customers who have more serious credit problems".
Nevertheless, by entering the adverse market, UCB is supplementing the range of options available to lower-income customers, whose 'unbanked' status has been the subject of acute government concern.
Recent revelations about the prominence of loan sharks in financially excluded communities increased pressure to devise affordable lending solutions.
This week, credit unions became able to provide current accounts for the first time.To learn more about bad credit mortgages, click here.
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