Magellan is currently trailing a new proposition aimed at borrowers with heavy adverse credit records and said it has been encouraged by response so far.
Clive Willson, sales director at Magellan, said: “The response we’ve had from brokers has been excellent.
“Our website received more than 1200 unique visits on launch day and we’ve seen a continuing high level of interest since then.
“Our distribution partners have also reported high volumes of telephone enquiries about the ways in which we can help borrowers with significant adverse credit records.
“It’s early days, but the response so far is very encouraging.”
Magellan is currently the only lender in the UK mortgage market that will consider applications from borrowers with large amounts of historical adverse credit.
Providing applicants can explain and document the reasons for their financial difficulties and can demonstrate they have had a clean credit history for the last 12 months, Magellan Homeloans will consider their application.
Matt Gilmour, managing director of Magellan, addedd: “Magellan’s launch inevitably raised concerns about a return to sub-prime lending of old, but I can assure brokers our proposition is very different.
“Our philosophy is that we’re less concerned about the amount of adverse credit a borrower may have accumulated in the past and are more concerned about what they have done to resolve their past difficulties and how well they have been able to manage their finances over the course of the last 12 months.
“In our opinion, a financial bad patch should not preclude borrowers from obtaining mortgages on a long-term basis, especially if they can prove they have regained control of their finances. Lenders and brokers cannot ignore borrowers who are currently locked-out of the mortgage market.
“We need to provide them with credible alternative solutions.”
Magellan offers borrowers a choice of five products, each accommodating different levels of credit impairment depending on the loan to value ratio.
The maximum LTV is 75% and all products have the same pricing, which is currently 8.55% (LIBOR + 8.00%). There are no early redemption penalties, so borrowers are free to move their mortgage at any time.
The new service is initially being piloted via a panel of mortgage networks which include Sesame, Intrinsic, IN Partnership, Pink Home Loans, First Complete, Homeloan Partnership, Mortgage Advice Bureau and The Whitechurch Network.
