Residential lending criteria

We are not considering applications outside of this criteria.
Click below for full details of our criteria,

• The Application 
• The Applicant/s 
• Income 
• Supporting documents
• Higher Lending Charge 
• Other properties owned by applicants 
• The Property 
• Tenure 
• Special schemes 

The Application

Minimum Loan

• £30,000

Maximum Loan

• £500,000 (subject to a maximum HLC of £50,000)

Term

• Maximum 40 years

Interest only

• Allowable up to a maximum of 80% LTV. Any borrowing over 80% must be on a capital and interest repayment basis.
• We require in writing, a description of the repayment vehicle to repay the mortgage at the end of the mortgage term.
• We require the repayment vehicle to have been in place for 6 months before the mortgage application is submitted.
• Where an investment based vehicle is in place, we will check that the estimated maturity value of the repayment vehicle provided, is at least 100% of the loan amount (using the assumed ‘middle growth rate’).

• We will accept sale of an investment property, or second home, provided the equity in the property is currently sufficient enough to cover the amount being borrowed
• Where a shortfall is identified, this element must be on either a capital and interest repayment basis, or the shortfall made up by means of increasing the deposit.
• It is your clients’ responsibility to ensure they have sufficient capital to repay the mortgage at the end of the term.

The Deposit

• The 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 been owned for less than 6 months will be considered on an individual basis
• In these circumstances, the 'free legal service' will not apply

The Applicant(s)

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 past 2 years and have permanent right to reside

Credit history

• We are unlikely to be able to assist applicants with CCJs or arrears
  • Bankruptcy should have been discharged for at least 4 years

Employment

• At the time of the application, the minimum length of time in current job is 6 months
• Applicants within a probationary period are not acceptable unless they are professionals on a standard 12-month probation, such as those in the police/fire service, etc
• Professional employees on fixed-term contracts with a minimum of 6 months until expiry who have worked in the same profession for a minimum of 3 years are acceptable. Typical industries falling in this category are the NHS and IT. This does not apply to unskilled, manual or clerical workers
• Where an applicant is, or will be, on maternity leave we will need the anticipated return to work date and income while off work before we can consider the application
• Temporary/agency workers are not acceptable

Income

Maximum multiples

• We will accept 3.75x single or 3.75x joint basic gross income

Self-employed

• We require 3 years of trading figures and will assess the latest net profit or salary plus dividends for a limited company

Other income we may assess

• Car allowance - 100%
• Regular overtime or bonus - 50%
• Commission - 50%
• 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.

Supporting documents

With each application, please provide certified photocopies of supporting documentation, not originals

• One full month’s bank statement
• The latest payslip and/or P60 or latest accounts
• ID for each applicant
  • UK or EC Passport
  • Full UK or EC driving licence (not a Provisional)
  • New style National Insurance card
  • Armed Forces ID card/police warrant card

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.

Other properties owned by residential 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

• New residential mortgages can be considered up to 90% max LTV where the customer is, for example, upsizing or relocating with their job.
• We need to be satisfied that the existing mortgages will be converted to a permanent letting agreement and we require:
  • Rental coverage of 125% of the mortgage commitment (based on a notional 4.50% interest rate)
  • This calculation must include any additional capital raising for deposit funds.
  • If the rental coverage is less than 125%, any shortfall will be annualised and deducted from income before applying our income multiples to new residential mortgages.
  • Consent to let confirmation, in writing, from the existing lender or a copy of the BTL remortgage offer from the new lender.
  • A professional letting agents letter confirming the potential rental income
• Where the customer/s have their existing residential property up for sale but may not have sold by the time they complete on the new purchase, the applicants income must be sufficient to cover both mortgages (in aggregate) within our normal income multiples and we require a copy of the estate agent's sales details

Existing BTL properties

• New residential mortgages can be considered up to 90% max LTV
• First time residential buyers with a BTL property in the background are not acceptable.
• Applicants must be current owner occupiers.
• Professional landlords will be considered and treated as self employed and we require 3 years accounts and/or tax assessments
• We will consider treating the BTL mortgage/s as self financing, subject to:
  • Rental coverage of 125% of the mortgage commitment (based on a notional 4.50% interest rate)
  • This calculation must include any additional capital raising for deposit funds.
  • If the rental coverage is less than 125%, any shortfall will be annualised and deducted from income before applying our income multiples.
  • Proof of rental income, via current tenancy agreement, bank statements or BTL mortgage statement.

The Property

Acceptable properties

• Properties in England and Wales
• The property must be the main permanent residence of the applicant(s)
• Property must be of traditional construction (ie, brick and tile)
• Wimpey ‘no fines’ and Easy Laing can be considered
• New build houses are acceptable up to the product LTV limits (we do not accept builders deposits)
• 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

Unacceptable properties

• Prefabricated properties
• Any construction covered by Housing Defect legislation, such as
  • High alumina cement; prefabricated reinforced concrete; large panel system; BISF
• Ex-local authority flats will not be considered
• Second homes/holiday homes are unacceptable

Self-build

• The advance will be released, normally, at eaves level, roofed in, plastered out and completed
  • Each stage will be subject to a reinspection
  • The aggregate of releases (until final stage) will usually be restricted to 65% of value at the time

Valuations

• All the above are subject to valuation
  • All valuations are instructed via a panel management company and encompass a variety of national surveying firms

Tenure

• Both freehold and leasehold are acceptable
  • If leasehold, the unexpired term of the lease must be at least equal to the mortgage term plus 30 years

Special schemes

Shared ownership/shared equity/Government Homebuy

• Shared ownership/shared equity/Government Homebuy are not acceptable

Right to Buy

• Applications are considered on the following basis:
  • Maximum loan 100% of 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
  • A copy of the right to buy letter should be obtained
  • Remortgage of a RTB property within the 5 year 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)