Credit Repair Criteria Guide

Transcription

1 Page 1 Credit Repair Criteria Guide 01 July 2015 Magellan Hmelans Ashcmbe Huse 5 The Crescent Leatherhead Surrey KT22 8DY Tel: Fax: Web: enquiries@magellanhmelans.c.uk FOR INTERMEDIARY USE ONLY (NOT FOR PUBLIC DISTRIBUTION)

2 Page 2 Apprved Submissin Rutes Acceptable Applicants Applicatin Submissin Applicatins will nly accepted by a mrtgage brker that is an appinted representative (a Netwrk AR ) f a mrtgage netwrk (a Netwrk ), r is a Directly Authrised intermediary (a DA Brker ) n the Magellan Distributin Register (each f a Netwrk and DA Brker an Intermediary ). Firms n the Magellan Distributin Register may als delegate the submissin f mrtgage business t ne f the Apprved Packagers n the Magellan Distributin Register. Applicants must be advised by a suitably qualified mrtgage adviser. Maximum applicants: 2 Minimum age 21 (Primary brrwer minimum age 25). Maximum age 75 fr applicants whse incme is used fr affrdability. Primary brrwers must be a UK resident with indefinite leave t remain and have been resident in the UK fr a minimum f 12 mnths. Minimum husehld incme: 20,000 Applicants will nly be cnsidered fr Credit Repair prducts if they have experienced an unexpected event that was beynd the reasnable cntrl f the applicant that led t an adverse credit histry as evidenced by a credit reference agency search r acceptable external surce (e.g. Curt dcument, Inslvency Practitiner s reprt). All dcuments shuld be certified as a true cpy f the riginal, and a true likeness f the applicant (if phtgraphic). When submitting applicatins we will require the fllwing dcumentatin: A fully cmpleted applicatin frm. Magellan applicatin fee payment. Prf f identity. Prf f residency (at the current address dated within the last 3 mnths). Prf f expenditure: last 3 mnths bank statements. Prf f incme (where incme is required fr affrdability): Emplyed: Last 3 mnths cnsecutive payslips. Self-emplyed: Latest annual accunts, r latest annual HMRC SA302 and Tax Year Overview, plus last 3 mnths business bank statements. Cntractrs: the current and previus cntract must be prvided t verify the value f the cntract(s). Pensin incme: Pensin prvider remittances/dcumentatin r last 3 mnths bank statements. Maintenance payments: Curt rder r last 3 mnths bank statements. Rental incme (net surplus incme = grss rental minus 125% f current mrtgage payment): Tenancy agreement, rental accunts r last 3 mnths banks statements. SA302 required t shw declared t HMRC. Investment incme: Investment vehicle statement r last 3 mnths bank statements. Lng term State benefits: Benefit s Office Statement r claim advice letter. (Benefits cannt accunt fr mre than 40% f ttal incme used in assessment.) Magellan Hmelans will btain a valid credit search, emplyer/accuntant/landlrd references (where applicable) and a valuatin reprt.

3 Page 3 Adverse Credit Explanatin All Credit Repair applicants are required t disclse, and prvide evidence where requested, the nature f the event that caused their adverse credit recrd. The circumstances f the event shuld indicate that it was beynd the reasnable cntrl f the applicant(s). Examples f acceptable events include: Event type Pregnancy / Maternity Divrce Separatin Serius illness r accident Stabilised reductin in incme Unemplyment r redundancy Death f clse family member Serius illness r accident f clse family member Business interruptin caused by cunterparty failure r default Business failure Errrs r system failures f the banking system Victim f stlen identity r fraud by a third party Example f acceptable evidence Birth certificate, hspital nte, cnfirmatin f maternity pay, child benefit letter. Decree, slicitr s letter, divrce petitin. Evidence f change frm jint t sle addresses, slicitr s letter, CSA/maintenance evidence. Hspital r dctr s nte, prf f statutry sick pay, health insurance claim dcument, emplyer s letter cnfirming perid f absence. Payslips/P60s r accunts shwing reductin, HMRC emplyment histry letter. P45, redundancy ntice, HMRC emplyment histry letter, DWP benefits letter, Insurance claim dcument. Death certificate, slicitr s prbate letter. Hspital r dctr s nte, prf f statutry sick pay, health insurance claim dcument, emplyer s letter cnfirming perid f absence. Inslvency practitiner s reprt, inslvency ntice, prf f cunterparty failure r default (inslvency/ administratin ntice, claim fr csts/damages awarded). Inslvency practitiner s reprt, inslvency ntice, Cmpanies Huse search, accuntant s letter. Bank letter. Slicitr s letter, bank letter, plice reprt, CIFAS cnfirmatin. Fr events nt listed abve the circumstances f the event must suggest that the event was beynd the reasnable cntrl f the applicant and cannt be a symptm f financial mismanagement.

4 Page 4 Applicant emplyment status Credit Histry Emplyed applicants: Must have 12 mnths histry f emplyment with a minimum f 3 mnths in current emplyment and nt in a prbatinary perid. Applicants must prvide cpies f the last 3 mnths cnsecutive payslips (printed by a pay bureau). The fllwing incme will be taken int accunt: Wages / salary, guaranteed cmmissin/bnus/vertime, 50% f regular nn-guaranteed cmmissin/bnus/vertime (subject t nt being mre than 40% f ttal incme used in assessment). Where incme is variable, an average ver the last three mnths, r annualised YTD figure, shuld be used, whichever is the lwer. Cntract wrkers: Minimum f 12 mnths cntinuus histry f cntracting rles within their relevant industry required. Current cntract must be fr a minimum f six mnths with a minimum f 3 mnths f the riginal term remaining (minimum 50% f riginal term must remain unless the brrwer can shw 18 mnths cntinuus service in the same type f emplyment). The value f the current cntract will nrmally be taken fr incme purpses, althugh underwriters may restrict incme t an average f the current and previus cntract, r the lwer f the tw if a substantial increase in value is bserved. Brrwers emplyed n a Cnstructin Industry Scheme (CIS) Cntract will be cnsidered. The average f the latest 6 mnths evidenced incme is used. Brrwers emplyed n a zer hurs cntract will be cnsidered if they shw a cnsistent level f incme. The ttal f the last 12 calendar mnths evidenced incme will be used. Custmers will be treated as self-emplyed if they pay their wn tax r sub cntract t mre than ne cmpany. Self-emplyed applicants: Applicants wh wn mre than 25% f their emplyer/business will be classed as self-emplyed and must have been self-emplyed fr a minimum f 12 mnths. Incme will be cnsidered as their prprtin f the cmpany/firm net prfit fr the last 12 mnth perid plus any incme r distributin deducted in favur f the applicant in arriving at net prfit. Acceptable prf f incme is the latest annual accunts (where the Accuntant is affiliated with an acceptable prfessinal bdy) r certified cpies f the latest annual HMRC SA302 and Tax Year Overview, plus certified cpies f the last 3 mnths business bank statements (unless this perid is included in the latest annual accunts). Please refer t an underwriter fr applicants shwing excessive increases r reductins in incme. Acceptable credit histry (see prduct guide fr prduct specific limits): Cunty Curt Judgements (satisfied r unsatisfied) mre than 12 mnths ld. Mrtgage Arrears mre than 12 mnths ld. Defaults mre than 12 mnths ld (unless the debt was included within a DMP) Repssessins ver 12 mnths ld may be cnsidered subject t cnfirmatin that any shrtfall has been r is being made gd r has been frgiven. Bankruptcy/Debt Relief Order discharged ver 12 mnths ag will be cnsidered subject t a Certificate f Discharge (if des nt shw as discharged n credit search). Applicants subject t an IVA fr mre than 12 mnths that has been cnducted satisfactrily. Applicants subject t a DMP fr mre than 12 mnths that has been cnducted satisfactrily. Unacceptable credit histry: Mre than 5 Cunty Curt Judgements (satisfied r unsatisfied). Mrtgage Arrears in the last 12 mnths. Defaults in the last 12 mnths. Repssessins within 12 mnths f applicatin. Any applicants with a failed IVA r wh have entered int an IVA in the last 12 mnths. Undischarged Bankruptcy/Debt Relief Order r Bankruptcy/Debt Relief Order discharged in the last 12 mnths. Applicants shwing recent dependence n shrt term credit, such as payday lans, within the last 12 mnths, recent excessive rising credit/stre card balances, r unpaid debits shwing n bank statements will nt be acceptable.

5 Page 5 Fees Gifted depsits Lending beynd state retirement age (SRA) Lan Purpse Magellan cmpletin fees can be added t the lan abve maximum Lan-t-Values. Clse family gifted depsits are accepted. Builder gifted depsits accepted t a maximum f 5%. Vendr gifted depsits will nt be accepted. Applicants declaring cntinued emplyment r self-emplyment beynd state retirement age will be subject t a plausibility assessment as t the likelihd f the incme being available after state retirement age. Where up t 20% f the term f the mrtgage extends beynd state retirement age (r declared retirement age if lwer), and applicants have mre than 15 years t pensin age, evidence f prvisin fr incme int retirement will be required. Where ver 20% f the term f the mrtgage extends beynd state retirement age (r declared retirement age if lwer), r if applicants have less than 15 years t pensin age, evidence f prvisin fr incme int retirement will be required and this incme will be used in affrdability assessment. We will cnsider lans fr: Purchases. Capital Raising fr Debt Cnslidatin. Capital Raising fr Hme Imprvements. Refinancing bridging finance prviding it was used t purchase a prperty at auctin within the last six mnths, r the lan was a traditinal bridge (a sale and purchase that des nt ccur simultaneusly, with the bridging lan prviding the additinal finance until the date f sale), the bridging lan was a regulated mrtgage cntract, and did nt include rll-up f interest. We will nt cnsider lans fr: Capital raising fr investments, financial speculatin r capital injectin int a new business. The supply f gds and services (als knwn as Debtr, Creditr Supplier (DCS) arrangement). Purchasing a Timeshare. Paying a tax bill r settle a HMRC demand. Refinancing prperty purchased with a mrtgage r re-mrtgaged less than 6 mnths ag (subject t the Firm s bridging lan criteria abve). Lan Size Lan term Minimum 25,001. Maximum 500,000. (Maximum 65% LTV fr prperties with value less than 75,000). Minimum lan term 5 years. Maximum 30 years.

6 Page 6 Prperty exclusins Repayment terms Prperties with a value f less than 50,000. Leasehld prperty with less than 55 years remaining n the lease at applicatin. New build prperties with mre than 5% builder gifted depsit. Prperties built in the last 10 years withut a relevant building certificate (e.g. NHBC, Zurich etc). Prperties determined as unacceptable security by the appinted valuer. Steel framed prperties. Prperties f 100% timber cnstructin. Prperties f 100% cncrete cnstructin. Defective cncrete built huses. Land r existing buildings purchased fr future develpment with n existing planning permissin. Prperties cntaining Mundic Blck materials. Prperties with restrictins as regards t ccupancy (e.g. agricultural, retirement flats). Prperties nt whlly wned by the brrwer (e.g. shared wnership). Freehld flats r maisnettes. Flats in blcks with mre than 5 flrs unless built pst 1990 and nt ex lcal authrity. Flats ver/adjacent t sme types f cmmercial premises. Flats higher than the third flr with n lift access. Envirnmentally cntaminated prperties. Mbile hmes / huse bats. Cmmercial usage (including prperties designated as live/wrk). Flying Freehld where mre than 20% verhangs anther prperty. Prperties underpinned within the last 5 years withut satisfactry guarantees. Lcal Authrity prperties within pre-emptin. Ex-lcal Authrity flats with a value f less than 200,000. Studi flats f less than 30sqm, withut a separate bathrm r, with a kitchenette. Capital and Interest nly. Unacceptable incme Emplyment related DWP payments including: Jb Seeker s Allwance, Incme supprt and Supprt fr Mrtgage Interest, Husing benefit. Expenses. Unverifiable incme. Undervalue transactins Clse family gifted equity is acceptable up t 90% f the discunted purchase price. Unacceptable undervalue transactins include: Any private sales incentives (unless they are discunted frm the purchase price), a transfer r sale at a reduced price between a Cmpany and ne r mre f its Directrs, r any transactin where we believe the mtive is fr the vendr t avid creditrs. This guide is nt intended fr distributin t custmers and is nt a financial prmtin under the Financial Services and Markets Act 2000 (Financial Prmtin) Order Nt fr display