Hinckley and Rugby Building Society has announced changes to its lending criteria, making it easier for people with past credit problems to get a mortgage.
The building society has relaxed the rules on its “credit flex” mortgage, which is specifically designed for those who might have been rejected by other lenders.
What are the changes?
Previously, Hinckley and Rugby had strict limits on the number and value of late payments, defaults, and County Court Judgments (CCJs) that borrowers could have on their credit history. The good news is that these limits have now been relaxed, meaning more people will be eligible for a mortgage.
Here are the key changes:
- County Court Judgments (CCJs): You can now have up to two CCJs on your credit file, as long as they are between three and 36 months old and total less than £500. Previously, any CCJ in the last three months would have disqualified you.
- Late payments: The lender will now accept up to five months of late payments on credit cards, utilities, and other bills within the last 24 months. If your late payments were over 24 months ago, any number will be considered.
- Debt Management Plans (DMPs): While you can’t have any active DMPs in the last 12 months, Hinckley and Rugby will now consider applications from those who have successfully completed a DMP or have been on one for at least 24 months.
- Defaults: The maximum total value of defaults allowed has been increased to £2,500 in the last 36 months (previously it was lower).
- Payday loans: You can now have a history of payday loans, provided none were taken out in the last six months. The total value of payday loans in the last 36 months cannot exceed £5,000.
A lifeline for borrowers
Christopher Holmes, from Hinckley and Rugby Building Society, said the changes would help more people get on the property ladder.
“We know a one-size-fits-all approach to lending doesn’t work,” he explained. “Our flex products are designed to be adaptable and meet the needs of borrowers who don’t fit the mould.”
He added that the credit flex mortgage offered “an affordable, flexible solution” for those often overlooked by mainstream lenders.