Residential Mortgage criteria as at 12 February 2015

Transcription

1 Residential Mortgage criteria as at 12 February 2015 Personal Details Min Age: Max Age: Lending into retirement: Address history: Ex-Pat: First Time Buyer: Guarantor: Islamic Mortgages: Multiple Applicants: Visa: Right To Buy: HomeBuy Direct/ Shared Equity: Shared Ownership: Key Worker scheme: Property owned in Trust: 2nd Property: 2nd Mortgage Agg Debt Vs Affordability: House for dependant relative: Armed Forces Concession: Client in Employer Accommodation: 18 all applicants; 21 for BTL There is no maximum age limit for a borrower, each request will be treated on a case by case basis. If the applicant will be retired at the end of the mortgage term, the following is required: Detailed assessment of how the applicant will repay the mortgage in retirement e.g. from a company/ private pension. Documentary evidence to demonstrate the retirement income. Confirmation that the Bank, or introducer, has discussed affordability in retirement with the applicants and that they are comfortable that they will be able to meet the mortgage repayments until the end of the mortgage term. All applicants must have been in the UK for the last 3 years. Defined as an applicant who has never owned a residential property in the UK. On joint applications, this applies to all applicants. Maximum of two. All applicants must have unrestricted stay in the UK. Accepted if for own or dependant relatives use. LTVs as standard. Affordability calculation needs to cover both mortgage balances. Accepted see notes above for 2nd property. Employment/Income Details Time in job/probation Period: Bonus: Bonuses (Where used as repayment vehicle): Overtime: Commission: 6 months in current job required, 12 months in continuous employment. Probationary period acceptable. 50% of average bonus used (average over last 3 years). Can be used as Interest Only repayment vehicle if substantial and track record for minimum 3 years, and commitment to make minimum lump sum repayment on each anniversary of mortgage. 50% of average overtime used (average over last 3 years). 50% of average commission used (average over last 3 years). Shift Allowance: Yes 100% Car Allowance: Yes 100% Rental Allowance:

2 Employment/Income Details (continued) Large Town Allowance: Yes 100% Second Job: Bursary Income: Foster Income: Yes 50% if 12 month track record and sustainable. Private Pension: Yes 100% Investment Income: Yes 100% Lodgers income: Maintenance Income Court Order: Yes 100% Maintenance Income Court Order: Trust Income: Benefits Child Tax Credit: Benefits Work Tax Credit: Benefits Child Benefit: Benefits DLA For Self: Benefits DLA for dependant: Yes 100%, must be guaranteed for term of mortgage Mortgage Subsidy: Yes 100% State Pension: Yes 100% Self-Employed Requirements: Umbrella companies: Accountant Qualifications: Number of accounts required: Profit figure used: Partnerships: Directors of Ltd Company: Contracts: Supply Teachers: Temporary/Fixed Contracts: Forces Concession: Maternity Leave: Foreign Currency: Classed as self employed if own more than 25% of business. Minimum of 3 years trading Yes - classed as contractors. for assessment. Main accountants qualifications accepted. Minimum 3 years trading & full accounts/sa302/accts refs Average of last 3 years, possibly 2 depending on trend. Yes. Treated as self employed (e.g. 50% net profit). If 25% or more ownership will use salary plus average dividend for last 3 years. specific details. However, as a guide the current contract should be a minimum 6 month contract with a history of contracts for at least 12 months. If the current contract is nearing its end, we may require evidence that it has been renewed. Income calculated as daily rate over 46 weeks. Only if long term track record average of last three years earnings. If returning within 3 months Latest payslips showing SMP, plus pre maternity payslip and letter from employer confirming return date and that salary will be the same. If going back under different terms, employment reference required. If return to work is greater than 3 months away refer. If client is paid in foreign currency this is acceptable subject to exchange rate calculation showing affordability is not tight. See other notes regarding time in UK etc.

3 Existing Mortgage/Debts Details BTLs in Background: Childcare and School Fees: Consent To Let: Let To Buy (BTL Mortgage): Let To Buy (Resi Mortgage): Proof of rental income required: Porting: n Simultaneous Sale & Completion: Other Debts: Need to demonstrate that any BTLs are self-financing. Taken as commitment if significant. considered on an individual basis. If the clients are moving to new main residence and letting their old property, we treat the application as a BTL. Where a client applies for a residential purchase mortgage but will be letting their old residence out (rather than selling), the old main residence mortgage will be ignored if an ARLA letter shows rent will cover the mortgage repayments once the client moves out. Proof via bank statements showing rental income and/or ASTs. Yes, refer for details. Treated as running 2 houses and affordability calculation will take into account both mortgage balances (if applicable). Any debts remaining on completion are deducted as a commitment, including credit card balances at 3% Any debts with less than 3 months to run can be ignored. Property Details/Purpose Areas of Lending: England/Wales, not Scotland. Subject to a minimum purchase price/valuation of 150,000 Agricultural Ties: Annexe/Granny Flat: Bed & Breakfast: Commercial property close by: Construction Timber Framed: Construction All Timber: Construction Thatched: Construction Steel Framed: Construction n Standard PRC: Construction Single Skin: Construction Japanese Knotweed: Construction n Habitable Ex Local Authority: t acceptable. Acceptable if used by own family/dependant relative. Above or adjacent to restaurants, food outlets, public houses, launderettes, hairdressers or other premises which might represent a fire risk or adversely affect saleability, or where the surveyor s comments are derogatory are not acceptable... Accepted subject to a satisfactory structural engineer s report. t accepted property has to be secure, structurally sound, insurable, working kitchen with running water, storage & ability to heat food and working bathroom with working loo, sink and ability to shower or bath. Houses accepted, flats not accepted. Flat: As standard LTV except new build buy to let (max 60%). Flat Max Floors: Flat over shops: Flat - Lift needed?: Holiday/2nd Home: Holiday Lets: Max. Above or adjacent to restaurants, food outlets, public houses, launderettes, hairdressers or other premises which might represent a fire risk or adversely affect saleability, or where the surveyor s comments are derogatory are not acceptable. Yes, if block 4 floors or over Affordability calculation needs to cover both mortgage balances. 2 kitchens: Yes, if in Granny annex (see above), otherwise no.

4 Property Details/Purpose (continued) Home For Dependent Relative: Leasehold: New Build definition: New build house: New build flat: New Build Incentives: Recently purchased property: Restrictive Covenants: Scottish Property: Self Build: Solar Panels: Studio: Valuation fee scale: Yes, standard LTV, affordability calculation needs to cover both mortgage balances. Minimum 50 years unexpired term on lease at end of mortgage term. Property built/converted in last 12 months (based on completion certificate). LTV as standard for residential, 60% max for BTL. LTV as standard for residential, 60% max for BTL. Builder Incentives accepted up to 2% of the purchase price (deposit must be from applicants own resources). Must be 6 months since purchase. specific criteria. Accepted for residential, not accepted for BTL. See product guide. Loan details Min Term: Max Term: 5 years Interest only - 25 years (residential), 25 years (BTL). Repayment 30 years (residential), 25 years (BTL). Min Loan: 50,000 Max Loan: 5,000,000 Max Loan by LTV Residential: Max Loan by LTV Buy to Let: Maximum 85% Maximum 80% Maximum 75% Maximum 70% Maximum 60% Maximum 55% Maximum 50% Maximum 75% Maximum 70% Maximum 60% Maximum 55% Maximum 50% Up to 750,000 loan amount Up to 1,000,000 loan amount Up to 1,500,000 loan amount Up to 2,000,000 loan amount Up to 2,500,000 loan amount Up to 3,000,000 loan amount Over 3,000,000 loan amount Up to 1,500,000 loan amount Up to 2,000,000 loan amount Up to 2,500,000 loan amount Up to 3,000,000 loan amount Over 3,000,000 loan amount Capital Raising: Deposit: Interest Only: Standard LTV for all purposes. Deposit must be from own resources unless gifted by a close family member. Where deposit is gifted, the donor must provide a letter confirming the money does not need to be repaid and they will have no financial interest in the property. Gifted deposits are not accepted for BTL purchases. Affordability is assessed on a capital and interest basis (where the means of capital repayment requires the customer to make regular payments, affordability will be assessed taking these into account rather than capital and interest). There must be a clear and believable means of capital repayment. We require suitable evidence of the repayment strategy. We will check on the repayment strategy at least once every two years. Maximum LTV is 70%.

5 Loan details (continued) Interest Only (continued): Acceptable repayment vehicles: Capital raising on unencumbered: Offers valid for: Extending Offers: The following will not be accepted as suitable repayment vehicles: Sale of property (including downsizing). Previous record of reducing debt. Future potential income. New investments (including those that have been in place for less than 12 months). Inheritance. Bonuses without commitment to repay capital. Future conversion to a Capital and Interest only mortgage. Any strategy that relies on increasing house prices. Sale of business a) Sale of investment property(ies) equity must be equal to 120% of the mortgage amount. b) Sale of existing investments (evidence of current value to be provided) c) Annual lump sum repayment (where there is a track record of large annual bonuses being received) Treated as remortgage. 3 months. Offers can be extended for 6 months on new build purchases. Yes, subject to up to date documentation being provided and case still passing underwriting assessment. Credit History Adverse: Previously Repossessed: Bankruptcy: Credit check/score: more than one CCJ or default for no more than 500 within the last three years; no arrears in the last two years. t acceptable within last 3 years; must be discharged. Credit search and score obtained. Buy to Let Rental calculation: Rent must cover interest only payments to the loan amount by 125%, calculated at 5.5%. Minimum Age: 21. First Time Buyers: Income: Portfolio size: Properties: Tenancy: t acceptable must be an owner-occupier. First Time Landlords accepted. At least one applicant must be earning an income (other than rental). Max 6 properties (above this treated as Commercial). Max 60% for new builds; no ex-local authority flats or studio flats. Single AST required for a minimum of 6 months. Tenants must not be family members, corporate, housing association, individuals receiving housing benefit or with diplomatic immunity.