Residential lending criteria

We will accept the following accountant qualifications:

AAPA, FAPA, ACMA, FCMA, ACA, FCA, ACCA, CA, CPFA, FCCA, MAAT, FMAAT, CTA (Fellow), FTII (Fellow), CTA, ATII, ATT, ACPA, and FCPA.

We only accept residential applications on an ‘advised’ basis. We currently do not offer an ‘execution only’ service to applicants.

The maximum age is 75 (at end of the mortgage term).

• If the applicant plans to work until age 75, we need written confirmation from the adviser on the broker declaration form.
  • The type of employment will need to reflect their ability to work to age 75.

• The minimum age is 18.
  • 55 for a retirement interest-only (RIO) mortgage.

The maximum number of applicants is four. Only two will be used for affordability. 

• Professional landlords are considered self-employed and we we need two years' accounts and/or tax assessments.
• For non-professional landlords, we'll consider buy-to-let mortgages as self-financing, subject to:
  • Consent to let will be needed, or proof the mortgage is on a BTL basis (BTL mortgage statement).
  • All background Buy to Let properties must be affordable based on an ICR of 125% and a stress rate of 5.5%.
  • Where there is a deficit this must be added as a commitment in the affordability calculation.
  • Proof of rental income and mortgage payment/s on the most recent bank statement/s.
  • This calculation including any added capital raising for deposit funds.

• We use ONS data to determine the household expenditure.
• We'll consider monthly credit commitments, including student loans. 
  Where a credit commitment has less than 6 months to run, the amount will not be factored into affordability however please add the details of the commitment to the application and tick to confirm that it will be repaid.
• We’ll use 3% of the outstanding balances on any/all credit cards as the monthly commitment figure.
• We will ignore debts that are to be repaid, the Underwriter will need confirmation and potentially evidence as to how the commitment is going to be repaid. A special condition may be added to the offer to reflect this.
• We will ignore ‘Sharesave Schemes’ when assessing affordability.
• We will not include 'Company Pension Contributions' when assessing borrowers’ affordability as this is built in to the affordability calculation.

Applicants must not have unspent convictions or pending prosecutions for fraud or dishonesty.

Subject to passing credit score, we can consider the following:

CCJs and defaults

• If registered within the last years, maximum combined £500 and must be satisfied.
• If registered over 3 years ago, defaults and unsatisfied CCJ’s of any amount and can be considered

Missed payments

• Status one and two are acceptable, provided the commitment is up to date.

Bankrupts must have been discharged for at least three years.

Our application systems create a soft footprint on decisions in principle applications. This is converted to a hard footprint on a full mortgage application.

Considered up to a maximum of 80% loan to value (LTV). Where the application includes capital raising to gift the proceeds to a third party. In that case, we'll require a gifting declaration form to be completed and submitted with the application.

• The applicant/s own deposit or a gift from immediate family is acceptable.
• Immediate family members include:
  • Spouse/civil partner, parents and grandparents, children, grandchildren and great grandchildren, brothers and sisters, mother in law and father in law, brothers in law and sisters in law, daughters in law and sons in law, uncles, aunts, cousins, nieces and nephews. Adopted, half, and step members are also included in immediate family.
• All deposit funds must be in the UK at the time of application. Deposits must be sourced from legally generated funds and not incur interest (i.e. increase in commitment during the mortgage).
• Unacceptable sources of deposit include but not limited to:
  • Funded by bank/personal or business loans.
  • Vendor cash deposits.

The customer(s) have their existing residential property up for sale but may have yet to sell by the time they complete the new purchase.

We'll assess as follows:

• Up to 90% loan to value (LTV), we will treat the existing mortgage payment as a commitment.
• Over 90% LTV, the existing mortgage must be redeemed.
• We need a copy of the estate agent's sales details.

The following criteria has a specific product range. You must select a foreign national/returning ex-pat product in order to avail of the following criteria. 

• Foreign national criteria is for residential only.
• Maximum 90% loan to value (LTV) for borrowers with sufficient UK credit data. Or where we can get enough overseas credit data from its data partner in one of the following countries.
• Countries include Austria, Canada, the Dominican Republic, Germany, India, Kenya, Mexico, the Philippines, South Korea, Spain, Switzerland, and the United States, Ukraine & south Africa.
• Where a borrower is from one of the above countries, but an overseas credit file match failed, or the bureau returned insufficient info, the case can still be considered up to a maximum LTV of 75%.
• We will accept applications from foreign nationals on the following visas:
  • Health and care worker.
  • Skilled worker.
  • Global talent.
  • Pre-settlement.
  • UK ancestry.
  • British national overseas.
  • Tier 2 (if granted before 1 Dec 2020).
  • Dependent (as a joint applicant).
  • Spousal/partner (as a joint applicant).
  • Armed forces exemption.
  • Family visa.
• You can choose from capital repayment, interest-only, or part and part options (subject to a suitable repayment strategy).
• No minimum time in the UK or minimum time remaining on their visa.
• Joint income can be considered subject to the dependent's visa.
• No minimum income. 
• Any income used for affordability must be in GBP.
• We allow customers applying for a foreign national product to use builders' incentives of up to 5% towards securing a deposit on a UK new build property.
• Self employed income can be considered as per our standard policy.
• Deposit - funds from abroad must be in the UK at the time of application.
• Gifted deposit from family is acceptable and can be from abroad however must be in GBP and in UK at the time of application.

Learn more about our foreign national and expat lending.

Are considered up to a maximum of 90% loan to value (LTV). Estimates will be required where borrowing above 80% LTV.

For each application, the identification we need includes:

• UK photocard driving licence (full or provisional).
• UK paper driving licence (full only).
• EU state member ID card.
• UK residence permit.
• UK or EU passport.
• Non-EU passport.
• Non-EU ID card.
• Council tax bill.

All submitted documents must be photocopies of the originals. We can’t consider photographs or camera-scanned documents.

Employed applicants

The calculator will apply deductions to gross income based on tax bands and national insurance (NI) contributions. It will then calculate the net income.

Term of employment

Providing that the applicant has a strong track record and no gap in employment within the same industry, we do not have a current minimum time in job role.

If there has been a change in industry or a gap in employment, we require a three month minimum time in role.

Contractors

Temporary/short term contracts:

• We can accept applicants on temporary or short term renewable contracts where the applicants can evidence that they have worked on fixed term contracts in the same line of work for a minimum of 12 months

Rolling contract

• We can accept applicants on rolling contracts where applicants can evidence that they have worked on fixed term contracts in the same line of work for a minimum of 12 months.

Zero hours contracts

• We accept applicants who are agency workers and applicants on zero hours contracts, provided they have been in the same role for the last 12 months.

Contractors working via an umbrella company are acceptable. We’ll assess income as weekly income minus employer national insurance (NI), umbrella company costs and apprenticeship levy × 46.

Maternity leave

We’ll consider maternity leave applicants and assess the return-to-work salary. Please provide us with:

• the last pay slip before maternity leave starts, showing the full-time salary. 
• whether the applicant will return to work full or part-time and the pro rata salary if applicable.
• full details of maternity leave pay, i.e. how many weeks are left at full pay, half pay and statutory maternity pay (SMP).
• the savings provisions they have in place to support the mortgage whilst on reduced pay.
• what childcare costs (if any) will be payable when they return to work.
• the intended return to work date.

Other income we may assess

Cash in hand: where employees are paid in cash, we need to verify this by regular cash payments into the bank account. We can’t assess the income if corresponding payments aren’t made.

• Profit from UK Land and Property if consistent and shown via two years SA302s minus finance costs: 100%. 
• Regular overtime or bonus (monthly, quarterly, six-monthly, annually - must prove regularity): 50%. 
• Child maintenance: 100% subject to six months' paid evidence on bank statements. 
• Second job income: 100% subject to six months' track record.
• Guaranteed bonus/overtime/shift allowance: 100%.
• State and occupational pension: 100%.
• Investment income: not acceptable.
• Large town allowance: 100%.
• Self-employed income.
• Travel allowance: 100%.
• Commission: 50%.
• State benefits:
  
  • Child benefit (max child age 13 yrs and max income of £60k for either applicant).
  • Disability living allowance.
  • Universal Credit (any element relating to housing will be deducted).
  • Personal independence payment.
  • All allowable at 100%, no more than 50% of the income on the application can come from benefits.

Self employed income

• We require the applicant to have at least two years of trading, if under three years we may ask for an accountants projection
• We will ask for the last two years' SA302s and corresponding TYOs.
• We’ll use the latest year's trading figures.
• If income fluctuates over 20%, we reserve the right to obtain a reference from a suitably qualified accountant. We want to confirm that the latest year's income is sustainable and discover why it fluctuated.
• SA302 and Tax Year Overview must relate to an entire 12-month trading period. We’ll consider cases where they may have incorporated from sole trader status to a limited company/partnership

• Allowable up to a maximum of 80% loan to value (LTV). If over 80%, the whole loan must be on a capital and interest repayment basis.
• We need, in writing, a description of the repayment vehicle to repay the mortgage at the end of the mortgage term.
• The repayment vehicle must’ve been in place for six months before the mortgage application is submitted.

Examples of acceptable repayment vehicles

• Sale of mortgage property: Maximum 60% LTV, minimum equity requirement £200k or 300k in London and the South East (minimum equity applies at point of application).
  • Only 80% of LTV is allowable using more than one repayment vehicle.
• Endowment.
• 25% of the projected total value of a defined contribution pension plan.
• 100% of the projected lump sum value of a defined benefit plan.
• Equity ISA.
  • The sale of investment property or a second home, unless occupied by a family member, isn't acceptable (it must be owned in the applicant’s/s’ name only).
  • If a shortfall is found this must be made up by increasing the deposit.
  • We’ll accept selling an investment property or second home in England and Wales if the property's equity covers the borrowed amount.
  • Your client must ensure they have sufficient capital to repay the mortgage at the end of the term.

Examples of unacceptable repayment vehicles

• Conversion to repayment in the future.
• Cash ISA.
• Overpayments from income.
• Future inheritance.

New residential mortgages can be considered up to 90% max loan to value (LTV) where the customer is, for example, upsizing or relocating with their job. We must be satisfied that the existing mortgages will be converted to a permanent letting agreement.

We need:

• All background Buy to Let properties must be affordable based on our current ICR.
• We'll annualise any shortfall if the rental coverage is under 125%.
• We will deduct it from income before applying our income multiples to new residential mortgages.
• No surplus rental income will be assessed.
• Where the existing property has little equity or negative equity, we may be unable to help, and the case should be referred to us before submission.
• Consent to let confirmation, in writing, from the existing lender or a copy of the let-to-buy (LTB) remortgage offer from the new lender.

• Mortgage product criteria may specify a maximum loan amount.

The minimum loan size is £30,000.

• Our maximum income multiple is 5.5x where the applicant’s gross income is at least £60,000 (combined where joint applicants). This applies to all borrower types (including foreign nationals) up to 95% loan to value.
• Our maximum income multiple is 4.49x for all other applications.

If the existing matrimonial/dependent relative(s) mortgage is to stay, we must be sure the new home is for the customer's use. 

We’ll assess as follows:

• Up to 90% loan to value (LTV), we will treat the existing mortgage payment as a commitment.
• Above 90% LTV the existing mortgage must be redeemed.

We’ll consider a pay rise where evidence of the increase can be provided. We’ll need a payslip showing the increase and a bank statement showing the new salary credit.

It’s assumed that an electoral roll search will verify proof of address. If verification doesn’t occur, you will be asked to submit one of the following documents:

• Bank statement (postal or printed and stamped in branch).
• UK photocard driving licence (full or provisional).
• UK paper driving licence (full only).
• Local authority tenancy agreement.
• Tax credit or pension credit letter.
• HMRC tax code notification.
• State pension letter.
• State benefit letter.
• Mortgage statement.
• Recent utility bill.
• Council tax bill.

All submitted documents must be photocopies of the originals. We can’t consider photographs or camera-scanned documents.

Sorry, we can’t use the same document to check the applicant's ID and address. If you can't provide any of the above documents, please contact intermediary support on 0344 481 2010. Press option two to chat about further options.

Take a look at our property criteria for residential and buy-to-let applications.

Properties owned for less than six months will be considered individually. In these circumstances, the free legal service won’t apply.

• We have specific criteria and a range of products for foreign national applicants, learn more about our foreign national criteria.
• Where the applicant has permanent rights to live in the UK, the following applies:
  
  • For foreign nationals, the applicant must have permanent rights to live in the UK and be able to prove this. 
  • HM Armed Forces personnel abroad are UK residents during their deployment.
  • The applicant/s must have lived in the UK for the past two years.

We'll accept the following retirement income for both retirement interest-only (RIO) and non-RIO lending:

We accept income from Self Invested Personal Pensions (SIPPs) and Self Administered Drawdown Pensions. The annual income we will use will be the equivalent of 4% of the current fund value at application.

Lending policy for RIO mortgages:

• Interest-only terms, with overpayment allowed, subject to early payment charges (ERCs).
• The sale of the property is the only repayment vehicle assessed at affordability.
• A maximum of two applicants, both using the property as their main residence.
• Capital raising is permitted subject to standard lending criteria.
• Maximum 60% loan-to-value (LTV).
• 55 minimum age.

Learn more about retirement interest-only lending.

• We will accept applicants up to the age of 75.
• If the mortgage term exceeds our assumed retirement age of 68, document the ability to pay the mortgage on a potentially reduced income.
• Max loan to value (LTV) restrictions will apply for applicants lending in or into retirement.
• Lending into retirement: if the applicant (or a joint applicant) has earned income, and the mortgage term extends past their intended retirement age. The max LTV 80%.
• Lending in retirement: if the applicants aren’t in receipt of any earned income and will be reliant on pension income only - max LTV 70%. 
• We’ll carefully consider affordability into retirement for older applicants nearing retirement age.

Applications are considered on the following basis:

The second charge will require a Deed of Postponement at extra cost to the applicant. This does not apply if only 12 months of the discount period remain.

• If no added funds are being raised, remortgaging an RTB property within the five-year pre-emption period can be considered.
• The RTB is usually restricted to the official tenants who must also be party to the mortgage.
• We don't offer RTB on flats, only houses.
• Maximum loan 100% of the discounted purchase price plus up to £250 costs.
• No added borrowing for home improvements is available.
• A copy of the RTB letter should be obtained.

Shared ownership/shared equity/Government HomeBuy purchases are not acceptable. We can consider a remortgage in which the applicant buys out the final tranche, but the free legal service is unavailable. We require a copy of the final tranche sale paperwork to be uploaded.

Take a look at out minimum packaging guides.  These are designed to help you package your applications as effectively as possible.

The maximum term is 40 years.

All products are subject to valuation. These are instructed via a panel management company and encompass a variety of national surveying firms.