Near prime borrowers in the U.K. mortgage market may begin seeing some refinance opportunities increase as Kensington Mortgages starts considering borrowers with county court judgments (CCJs).
A CCJ is a judgement issued by the court when a borrower fails to make the payments stated in the contract of a credit agreement. The courts then set an affordable regular payment based on the individual's circumstances. Kensington plans to consider applicants who have had up to two CCJs totalling a maximum of £750 ($1,000), only if they have been satisfied for more than six months.
They call the product “Prime One”, and are offered up to 70% LTV, with a two-year fixed rate mortgage at 6.39%. Kensington's prime product offering is at 4.99% for up to 75% LTV, the additional margin for a poorer credit record is over 1%, explained analysts at Barclays Capital.
"With the non-conforming market in the U.K. decimated by the turmoil in the credit markets, and the number of mortgage products in this sector almost negligible for the past six months, this will provide welcome relief to borrowers with sufficient equity in their property," said analysts at Barclays.
The product could equally offer some aid to U.K. non-conforming transactions, as borrowers may have found a lender with which to remortgage.