Magellan made the cuts as it looks to more closely target the credit repair market.
Mark Snape, managing director lending at Magellan Homeloans, said: “It became apparent to me when I joined the business earlier this year that brokers were confusing Magellan with the type of sub-prime lenders that exited the market prior to the credit crunch.
“Having worked in that market for many years, I was aware that the type of business which used to be written by those lenders was very different to the business Magellan is targeting today. I therefore felt there was a need to change the focus of our products.
“Magellan is a credit repair lender. Although we’ll take into consideration significant historical adverse credit histories, we don’t lend to anyone with outstanding credit issues incurred in the past 12 months, which makes us not only different to sub-prime lenders of yesteryear, but also near prime lenders today.
“Our range is targeting borrowers who have suffered one-off life events such as redundancy, divorce, or long-term illness which led to financial difficulties.
“However, they have got their finances back on-track and now deserve a second chance.”
Snape continued: “The new lower mortgage rates, along with changes to the way we assess affordability, means that more applicants will now have access to competitively priced mortgage funding.
“We have also made a number of criteria changes, including raising the maximum LTV to 75% for borrowers in debt management plans and allowing our fees to be added above our maximum LTVs.
“Having spoken to a number of intermediary partners, it is clear they are enthusiastic about these changes. They have also confirmed there is a significant market for our proposition and are very positive about our new range and the prospects for the year ahead.”
Magellan Homeloans will consider mortgage applications from borrowers who can explain and document the reasons for their financial difficulties and can demonstrate they have not incurred any new adverse credit during the last 12 months. Magellan doesn’t use credit scoring, preferring instead to assess applications based on their own merits.
Their panel includes Sesame, Intrinsic, IN Partnership, Pink Home Loans, First Complete, Homeloan Partnership, Mortgage Advice Bureau, The Whitechurch Network and Stonebridge.