West One Loans has announced the launch of new buy-to-let mortgage options designed to give a helping hand to those who’ve hit a bump in their credit history. This innovative offering could be a lifeline for landlords who have faced financial difficulties, especially in the wake of the recent economic challenges.
The highlight of West One’s announcement is the introduction of two brand new products within their buy-to-let range. These products are specifically tailored to landlords who have encountered credit issues in the past but are looking to move forward and invest in property once more.
New Product Details
The new offerings include:
- A five-year fixed-rate mortgage at 6.84%, with a 4.99% fee.
- A five-year fixed-rate mortgage at 7.29%, with a 2.5% fee.
Both options are available for loans up to 65% of the property’s loan-to-value (LTV) ratio, making them accessible for a wide range of investment properties.
Understanding the Eligibility Criteria
West One is opening the door to borrowers with certain credit issues, acknowledging that past financial problems don’t necessarily reflect current financial stability. Eligible applicants can have:
- Up to one default in the past 12 months (none in the last three months), with a maximum value of £5,000.
- A single County Court Judgement (CCJ) in the past 12 months, again with none in the past three months and capped at £5,000.
- One missed mortgage payment within the last year, with a clean slate in the most recent three months.
- Importantly, applicants must not have declared bankruptcy or entered into Individual Voluntary Arrangements (IVAs) in the past six years.
The lender is willing to overlook certain impaired credits older than 12 months, including unsecured arrears or missed utility payments, provided there’s a satisfactory explanation.
Additional Product Features
The maximum loan amount under this scheme is £500,000, and the rental income calculation will be based on the product’s pay rate. West One is also flexible regarding the type of property, including smaller House in Multiple Occupation (HMO)/Multi-Unit Blocks (MUBs), and even those situated near or above commercial premises.
Encouragement for Brokers
During the roll-out of these new products, West One is urging brokers to get in touch with their Business Development Managers (BDM) or the broker support desk. This step ensures that potential cases are thoroughly evaluated against the new criteria, facilitating a smoother application process for landlords.
A Timely Initiative
Andrew Ferguson, the managing director of buy-to-let at West One Loans, emphasised the significance of these new options, “Landlords are not immune from what is happening in the economy and a growing number of them are facing financial challenges. Landlords rely on tenants to pay in full and on time. When they don’t, which is an increasing occurrence since the pandemic, landlords are at risk of missing payments and acquiring blemishes on their credit record, even though overall they remain a good credit risk. The W3 option provides a solution to borrowers who can demonstrate that their problems are behind them and are fundamentally a sensible credit risk. We believe with the improving economic environment, the timing of this new launch makes sense commercially. This particular market is underserved and we are pleased to be able to support borrowers who have had credit issues with this enhancement to our product range, building on our existing W1 and W2 credit criteria, allowing us to support an even wider range of landlords.”