- Tenure
1. The Application
Minimum Loan - £30,000 Maximum Loan £500,000 (subject to a maximum HLC of £50,000)
Term – max 40 yrs
Interest only is acceptable up to a maximum of 80% LTV, subject to a suitable repayment vehicle being in place. A description of the repayment vehicle or explanation how the applicants intend to repay the mortgage at the end of the mortgage term is required. Any borrowing above 80% LTV must be on a capital repayment basis. It is your clients’ responsibility to ensure they have enough capital to repay the mortgage at the end of the term. We do not accept ‘downsizing’, ‘inheritance’, ‘conversion to repayment in the future’ or ‘will pay off lump sums’ as an adequate explanation.
The Deposit - applicants' own deposit or a gift from family is acceptable. We do not accept builders incentives/deposits.
Debt consolidation and capital raising considered up to a maximum of 80% LTV
Home Improvements considered up to a maximum of the product LTV limit
Remortgages - properties that have not been owned for 6 months will be considered on an individual basis. In these circumstances, the 'free legal service' will not apply.
2. The Applicant/s
Age
Minimum age – 18
Maximum age – 70 (at end of the mortgage term)
where the proposed mortgage term is likely to exceed the applicants retirement age(s), the ability to continue to pay the mortgage on a potentially reduced income should be documented.
Residency - The applicant/s must have resided in the UK for the last 2 years and have permanent right to reside.
Credit History - Where enquiries reveal CCJs or arrears, we are unlikely to be able to assist. Bankruptcy should have been discharged for at least 4 years.
Employment
Length of employment - At the time of the application, the basic minimum length of time in current job is 6 months. Applicants still within a probationary period are not acceptable unless professionals who typically have a standard 12 month probation i.e. police/fire service.
Fixed term contracts for employees with a minimum of 6 months until expiry are acceptable, provided they are professionals (i.e. excludes unskilled, manual, clerical workers) and have worked in the same profession for a minimum of 3 years. Typical industries falling in this category are the NHS and IT.
Maternity Leave where an applicant is, or will be, on maternity leave the following information is needed for us to consider the application - anticipated return to work date and income whilst off work.
Temporary/Agency workers are not acceptable.
3. Income
Maximum Multiples = 3.75 x single or 3.75 x joint basic gross income.
Self Employed – we require 3 years trading figures and will assess the latest net profit or salary + dividends for a Ltd company.
Other Income we may assess
Car allowance – 100%
Regular overtime or bonus – 25%
Commission – 25%
Maintenance – 50% (with or without court order)
Child Tax Credit – 50% (excluding child care element)
Working Families Tax Credit – 50%
State and Occupational pension – 100%
Investment income – not acceptable
2nd Job income – 50% subject to 6 months track record
Commitments - We will annualise and deduct any monthly credit commitments (including student loans) where there is an outstanding term of 6 months or more. We will use 5% of the outstanding balances on any/all credit card as the monthly commitment figure.
Proof of income required on all applications. Most recent months payslip/s.
4. Higher Lending Charge
A higher lending charge is payable on loans above 80% LTV.
| Advance | Premium |
| 80.00% or below | No higher lending charge |
| 80.01% - 90.00% | We pay the higher lending charge for the borrower |
| 90.01% - 95.00% | Higher lending charge payable by the borrower at £9.19% |
There is no Higher Lending Charge on Buy to Let mortgages.
5. Other Properties Owned by Applicant/s
In the circumstances below, we must be totally satisfied that our security will be the customer's main permanent residence.
Let to Buy
Can be considered up to 80% max LTV where the customer is for example upsizing or moving with their job. We will treat the existing mortgage payment as a monthly commitment and annualise this and then deduct this from the client/s income before the multiple is applied. We will require written confirmation of consent to let from the existing lender OR a copy of the BTL remortgage offer from the new lender. A letter from a professional letting agent should also be provided confirming the potential rental income.
Where the customer/s have their existing property up for sale but may not have sold by the time they complete on the new purchase, we will treat the existing mortgage as a commitment (as above) and we require a copy of the estate agent's sales details.
Existing BTL properties
First time residential buyers with a BTL property in the background are not acceptable.
We will consider treating the BTL mortgage as self financing, up to a maximum LTV of 80% subject to the following:
Applicants must be current owner occupiers and be able to provide proof of rental income, via a current tenancy agreement, their bank statements or BTL mortgage statement.
The BTL property must have a minimum rental history of 1 year.
Any shortfall in rent to cover the mortgage payment will be treated as a commitment. We will not assess any surplus rental income.
6. The Property
Properties in England and Wales are acceptable
The property must be the main permanent residence of the applicant/s
Second homes/holiday homes are unacceptable
Property must be of traditional construction (i.e. brick and tile)
Wimpey ‘no fines’ and Easy Laing can be considered
Unacceptable properties; prefabricated, any construction covered by Housing Defect legislation (High alumina cement; prefabricated reinforced concrete; large panel system; BISF)
New build houses are acceptable up to the product LTV limits (we do not accept builders deposits)
No Ex-local authority flats will be considered
Flats/Maisonettes (including new build) are acceptable for owner occupiers (not for BTL applications) but must be leasehold, and maximum LTV 80%. If in a block, must be a maximum of 10 storeys. We will not lend on flats that are above the 4th floor without lift access. If above a shop, flat must have its own entrance separate to the shop entrance
Self-build - the advance will be released, normally, at eaves level, roofed in, plastered out, completed. Each stage will be subject to a re-inspection. The aggregate of releases (until final stage) will usually be restricted to 65% of value at the time.
All the above are subject to valuation. All valuations are instructed via a panel management company and encompass a variety of national surveying firms.
7. Tenure
Both freehold and leasehold are acceptable. If leasehold, the unexpired term of the lease must be at least equal to the mortgage term +30years.
8. Special Schemes
Shared Ownership/Shared Equity/Government Homebuy – not acceptable
Right to Buy - applications are considered on the following basis:
Maximum loan 100% discounted purchase price plus up to £250 costs (No additional borrowing for Home Improvements is available)
The right to buy is usually restricted to the official tenants who must also be party to the mortgage. Therefore a copy of the right to buy letter should be obtained
Remortgage of a RTB property within the 5 yr pre-emption period can be considered if there is no additional monies being raised. The second charge will be subject to a Deed of Postponement at extra cost to the applicant/s (unless there is only 12 months of the discount period remaining in which case no Deed of Postponement will apply).
