Accord Mortgages has announced changes to its lending criteria designed to improve access to mortgages for underserved borrowers, including foreign nationals without indefinite leave to remain (ILR) and applicants receiving Universal Credit.
From today, the intermediary-only lender has increased the maximum loan-to-value (LTV) ratio for cases where no applicant has ILR from 75% to 90%, provided that at least one borrower has a minimum income of £50,000.
Where this income threshold is not met, lending will remain capped at 75% LTV.
For joint applications in which one applicant has ILR, Accord will continue to lend up to 95% LTV.
In a further shift, Accord will now accept Universal Credit as a source of income in affordability assessments, provided at least one applicant also receives earned income.
60% of the Universal Credit amount will be considered, excluding housing allowance, service charges and the child element for children aged 11 or over.
Evidence will be verified through the most recent Award Letter.
Accord said the move underlines its commitment to “common-sense lending” by widening access to mortgages for customers who may struggle to meet traditional criteria.
Nicola Alvarez, head of strategic partnerships and propositions at Accord, said:
“We’re so pleased to make these changes, which mean that we’ll be able to help more underserved borrowers to achieve their home ownership dreams, whether they are buying their first home, moving up the property ladder, or remortgaging.
“Enhancing our criteria for those without indefinite leave to remain means that we can support them in achieving their home ownership aspirations, building a more stable future for themselves and their families.
“Accepting Universal Credit as part of our affordability assessment further supports our commitment to common-sense lending, opening up opportunities for brokers whose clients may be finding it more challenging to get the mortgage they need.”
