Having Netflix or Spotify can help struggling first-time buyers get a mortgage

Subscriptions like Netflix and Spotify can help struggling first-time buyers get a mortgage. A new partnership between the Leeds Building Society and credit bureau Experian will allow lending decisions to factor in additional evidence of a borrower’s good financial performance.

This is because regular debit payments over the past 12 months, such as local taxes and subscriptions to digital entertainment services like Netflix and Spotify, have contributed to credit scores and are now factored into societal mortgage applications. I mean Open banking technology that enables people to share information securely is behind this initiative.

Open banking is used to link a borrower’s current account payments to their credit score. It will be connected to the Leeds lending system.

Open Banking is an initiative that allows consumers to share their banking transactions with Financial Conduct Authority accredited third parties via a secure connection. Data cannot be shared via open banking without the consumer’s explicit consent.

The Leeds Building Society said that 7.5% of the Society’s applicants were able to improve their credit scores by using Experian Boost during testing. Leeds isn’t alone in revealing innovative ways to make first-time homebuyers’ dreams come true.

On Tuesday, the Skipton Building Society announced a new zero-deposit mortgage deal aimed at renters aspiring to be first-time buyers. According to Skipton, tenants over the age of 21 may be able to take out a mortgage between 95% and 100% of the price of the property they want to buy.

In return, they must demonstrate a strong track record of paying rent, have proof of a minimum of 12 months of rental history, and pass affordability and credit checks. Skipton’s proven mortgage is his 5-year fixed rate product with an interest rate of his 5.49% and a maximum mortgage term of his 35 years.

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The Leeds Building Society has more than 800,000 customers and helped 18,000 get a mortgage last year. We lend up to 95% of the value of your home for both bulk purchase and joint ownership mortgages, and your application is also eligible for a credit score boost.

Last year, Leeds stopped financing second-home homes to focus on first-time buyers.

Richard Fearon, CEO of Leeds Building Society, said:

“Often it’s not their fault that these groups have to spend most of their income on rent and other regular payments, so they can struggle to build a good credit score. Yes. In fact, the majority of Boost’s existing users are renters.

“Housing is at its most affordable point since its inception in 1875, a sad indictment of decades of laziness over Britain’s housing crisis. But we’ve been doing so for almost 150 years. As such, we will continue to find ways to bring homeownership within reach and support more people.”

Sigga Sigurdardottir, Managing Director of Consumer Services at Experian, said: With many people across the UK facing barriers to owning a home, Boost users will now be able to use their boosted scores to move up the ladder, making homeownership a dream come true for people across the UK. I am happy to be closer to you. “

When evaluating an individual’s mortgage application, lenders must consider factors such as income, employment status, and overall financial stability in addition to credit scores. Experian Boost can provide an additional layer of information, potentially favoring some borrowers who might otherwise have been rejected.

The option to include Experian Boost in your Leeds Building Society credit score is currently only relevant for residential single-applicant mortgage applications. Leeds said Boost with two applicants and his scores will be published soon. Not all credit scores go up with boosts, but they never lower credit scores.

According to the Leeds Building Society, customers can opt in and out of the Boost service at any time.