This poor credit loan is for both, buy to let and residential borrowers. Loans are available on a second charge basis, which gives borrowers an option for credit repair or capital raising, without losing the existing deal on their current mortgage.
Many property investors, and sometimes their brokers, overlook second charges as a potential solution. There are a number of secured loans for BTL investors, offering prime rates and some great features, such as flexible overdrafts.
This article deals mainly with Buy to Let loans, where the borrower has a poor credit history. There is a range of options available, accepting varying degrees of poor credit including mortgage arrears, CCJ’s, defaults and IVA’s.
However, don’t assume because you have a low credit score, that you have poor credit. Some lenders don’t actually look at your credit score, so you might get lower rates. These products are aimed at those with CCJ’s, mortgage arrears, defaults – even previous bankrupts. The loan to value available and rates of interest will be determined by the level of poor credit and it’s recency. These are a sample from one lender at the time of publishing.
80% LTV poor credit loans are available for any amount of previous arrears, CCJ’s, defaults and payday loans subject to:
No CCJ’s or defaults registered in the last 3 months
No current arrears and none missed in the last 3 months
Haven’t taken out any payday loans in the last 3 months
Any Debt Management plan must be active for 12 months and well maintained
Minimum valuation £150K – (75% LTV available with minimum value of £100K)
A reasonable explanation to support no recurrence likely
Normal affordability checks for employed and self employed applicants
Available on BTL’s and Residential
No credit score
Any amounts of adverse over 3 months old normally accepted
any unsecured arrears normally accepted
Rate is 9.65% variable for 80% with heavy previous adverse
Second charge only – max loan £45,000
75% LTV poor credit loans are available subject to additional terms:
A maximum of 2 months current mortgage arrears
Annulment of bankruptcies allowed
no limit on CCJ’s, defaults and payday loans
max loan £100,000 – rates from 10.5% variable
Up to 6 months current arrears considered
max loan £75,000
This 80% LTV product can be used for credit repair or where funds are required at a high LTV but there is recent adverse. Bear in mind, however, the early repayment charges are 3 months interest in the first year reducing by 1 month each year. This needs to be considered if the plan is to credit repair and remortgage.
Always speak to a specialist to ensure the terms are fully understood
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