Intermediary Guide to Lending Criteria

Transcription

1 Intermediary Guide to Lending Criteria This Guide is for Owner Occupied Mortgages Only FOR INTERMEDIARY USE ONLY February 2016 version 3.0 re: Lending Policy version 4.0

2 CONTENTS INTRODUCTION PURPOSE OF BORROWING CUSTOMERS NEW LOANS / REMORTGAGES STATUS Income Multiples Employment Foreign Nationals Impaired Credit Debt Consolidation NON STANDARD INCOME AGE AFFORDABILITY MORTGAGES PROPERTY EVIDENCE OF SOURCE OF DEPOSIT EVIDENCE AND CONFIRMATION OF INCOME EVIDENCE REQUIRED FOR SELF EMPLOYED STATE BENEFITS PENSION INCOME EVIDENCE AND CONFIRMATION OF EXPENDITURE EXISTING CREDIT ARRANGEMENTS TERM PROPERTY VALUE MINIMUM LOAN MAXIMUM LOAN MAXIMUM LTV FEES PRODUCT TYPES LOCATION TYPES AGE February 2016 version 3.0 re: Lending Policy version 4.0

3 INTRODUCTION This guide contains the main points of Buckinghamshire Building Society s current Lending Criteria in relation to owner occupied mortgages. This is not the full policy and if there are any specific queries for information not contained in this guide, please refer to our mortgage team. In conjunction with this Guide, leaflets are produced for all mortgage products, and these must be referred to as there may be some terms and conditions specific to individual mortgage products that need to be taken into account. All mortgages are individually underwritten and do not rely on credit scoring. PURPOSE OF BORROWING NEW LOANS / REMORTGAGES: The Society will consider an application for the following purposes: The purchase of a house for residential occupation. A loan on an unencumbered property. Remortgage from another financial institution. Any combination of the above. The Society will not consider loans for the following purposes: To clear gambling debts Unsecured Lending Non-Sterling Mortgages Home Reversions Second Charge Lending - The Society will only lend on a first charge basis unless a charge is being placed on additional security ie for a guarantor. CUSTOMERS STATUS Maximum number of applicants is 4 Minimum number residing in property is 1 Convictions: The Society will not consider applications where a conviction exists, unless it has been spent under the Rehabilitation of Offenders Act Similarly, the Society will not consider any applicant convicted of a financial crime or fraud or any similar actual or pending conviction that may impact the likely conduct of the mortgage. Income Multiples Single applicant - Not in excess of 4.5 times the income Joint applicants (2) - Not in excess of 4.5 times the income of the main applicant plus 3.0 times the income of the second applicant OR 4.00 times the joint income In the case of 3 or 4 applicants, normal income multiples apply if up to 2 incomes are used. If more than 2 incomes are used the multiple will be 3.5 times the total income April 2016 version 4.0 re: Lending Policy version 4.0 1

4 Employment We accept employed customers We accept self-employed customers We do not accept customers whose evidence of income is self-certified We do not accept customers on income support o Foreign Nationals Other state benefits are assessed on an individual basis Customers from EEA countries and Switzerland must have 36 months provable UK residency and a current passport. Customers from other countries must have 36 months provable UK residency plus a right to reside or indefinite leave to remain stamp and a current passport. Impaired Credit We do not lend to customers with Diplomatic Immunity. The Society does not lend to customers with impaired credit, which is defined as: Arrears of 3 months or more on other secured or unsecured loans within the previous 2 years Having one or more satisfied or unsatisfied CCJs with a total value of more than 500 in the previous 3 years Been subject to an IVA or bankruptcy in the previous 3 years Debt Consolidation Both pre and post consolidation budget planners are required. All debts which form part of debt consolidation will be held on a retention basis and cleared by the Society. NON STANDARD INCOME We will accept applications from borrowers whose income is not standard, into certain products, provided there is full proof of income, in the following areas: Self-employed Contractors Income dependent on bonus / commission AGE Minimum age 18 AFFORDABILITY EVIDENCE OF SOURCE OF DEPOSIT All sources of deposit must be evidenced in all cases with the exception of equity from a concurrent sale. Evidence can include: April 2016 version 4.0 re: Lending Policy version 4.0 2

5 bank statements building society statements gifted letter ISA accounts other savings vehicles EVIDENCE AND CONFIRMATION OF INCOME Income must be verified by a combination of the latest: tax returns P60 3 months salary slips Accountants certificate Employers references 3 months bank statements EVIDENCE REQUIRED FOR SELF EMPLOYED This applies to all applicants whose income is not earned PAYE or who have a shareholding in a company of 20% or more. Evidence must include: Latest 2 years net profit Annual tax return SA302 Company accounts Qualified accountants certificate STATE BENEFITS The following state benefits will be taken into account in addition to other income. We do not lend to borrowers on income support. Child tax credits State pension Disability Living Allowance (DLA) Severe Disability Living Allowance (SDLA) Working tax credits Incapacity benefit Attendance allowance Carers allowance Employment and support allowance (ESA) Any other appropriate benefits PENSION INCOME Pension income used for affordability must be a private pension in addition to state pension. State pension is not considered as the sole source of income. Evidence required is: Bank and / or pension statements 3 months payslips (if employee pension) 12 month / annual pension statement April 2016 version 4.0 re: Lending Policy version 4.0 3

6 EVIDENCE AND CONFIRMATION OF EXPENDITURE Identify all fixed expenditure Mortgage Rent and Service Charges Household Utilities (Gas, Electric, Water) Phone (landline, mobile) TV (licence, satellite) Council tax Insurance policies Child care Membership Maintenance Pensions Personal Loans/HP/other Secured Lending Broadband Annual expenditure ( 12 if annual and not taken monthly) Car insurance and maintenance Building insurance / Contents insurance Car tax Additional monthly expenditure Household Housekeeping Socialising Personal up keep Travel/Holidays Credit and store cards Lottery Savings Subscriptions Petrol/Diesel EXISTING CREDIT ARRANGEMENTS Record of all credit arrangements Credit cards Loans HP Car finance Interest free Student loans Store cards Catalogues Mobile phone/s Obtain copies of up to date credit reports Credit cards cleared monthly should be recorded as zero balance April 2016 version 4.0 re: Lending Policy version 4.0 4

7 STRESS TESTING Affordability is stressed in accordance with our policy to take into account future changes in circumstances. MORTGAGES TERM Up to 35 years dependent on individual circumstances. PROPERTY VALUE Minimum property value is 50,000, although a different value may apply to individual products. See the product guide for details. There is no maximum property value. MINIMUM LOAN There is no minimum loan size, although this is stated in each product guide and may differ. MAXIMUM LOAN The maximum loan size is 1,000,000 up to 80% LTV and 500,000 up to 95% LTV. MAXIMUM LTV 80% on capital and interest repayment basis without a higher lending charge. 75% on interest only without a higher lending charge. 95% for purchases on capital and interest repayment basis including higher lending charge. 90% for remortgages on capital and interest repayment basis including higher lending charge. 80% for capital raising for business purposes. FEES Fees differ for each mortgage product. Refer to the relevant product guide. In general the fees charged are made up of: Admin fee payable on application and non-refundable Arrangement fee which may be paid on application or added to the loan CHAPS fee added to the loan Sealing fee paid on redemption Valuation fee paid on application Solicitors fees paid on completion Some remortgage products are offered with free drive by valuation fees and free solicitors fees using the Society s solicitors for like for like remortgages April 2016 version 4.0 re: Lending Policy version 4.0 5

8 PRODUCT TYPES Current product types can be seen in the Product Overview sheet and full terms and conditions are in the specific product guides. Loans may be on a capital and interest repayment basis or interest only with a suitable repayment vehicle. Repayment Vehicles Pension; stocks and shares ISA; endowment policy; stocks and shares; other investments (subject to valuation and volatility assessment); second property; sale of mortgaged property (except BTL). PROPERTY LOCATION We lend on properties in England and Wales only TYPES ACCEPTABLE Traditional construction Flats in blocks up to 4 storeys without lift access More than 4 storeys without lift access may be acceptable subject to a maximum of 20 storeys Flats above 4 storeys with lift access Post 1970 timber frame providing: Wholly timber construction (although some period properties may be acceptable) Brick / block exterior Mundic block group 1 if valuation acceptable Leasehold flats over shops without HLC providing: Valuation acceptable Self contained with separate entrance Up to 4 storeys Refer to management if restrictive covenants in place NOT ACCEPTABLE Group 2 mundic block Steel framed houses built pre 1980 Mobile homes Houseboats Flying freehold that in the judgement of the Underwriter and / or the valuer may mitigate against the future sale of the property AGE There are no restrictions on the age of the property. However, properties built in the last 10 years must have the benefit of one of the following warranties: NHBC; CRL Structural Home Warranty; LABC; Buildzone, Premier Guarantee; Building Life Plans and Build Assure (CML/BSA approved). The Society will not accept applications if an architect s certificate is being used instead of a warranty issued by one of those listed above. April 2016 version 4.0 re: Lending Policy version 4.0 6

9 All Products are subject to change or withdrawal at any time. The Society reserves the right to reject any application. All mortgages are subject to status and valuation. The Society records phone calls for monitoring and training purposes. Contact our Business Development Managers Monday to Friday 9.00am to 5.00pm on: Julie: Stewart: Or visit our website: Buckinghamshire Building Society High Street Chalfont St Giles Bucks HP8 4QB Tel (Mortgage team direct): Buckinghamshire Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registration Number YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE April 2016 version 4.0 re: Lending Policy version 4.0 7