Lending criteria terms beginning with `A`
Acceptable income types
For us to include income it must be evidenced. Please contact us if you wish us to include benefits/allowances when considering affordability or if you are uncertain of our requirements.
In order to assess affordability we must be able to establish income net of any taxes and any other deductions at source payable by the customer.
The acceptance of an income source is at our discretion.
Adding fees to the loan
We can consider adding Arrangement fees to a Buy to Live mortgage within our Loan to Value parameters. See Product Guide for more information.
Please ensure that your customer understands the cost impact of adding an Arrangement fee to a mortgage over its lifetime.
We cannot add Arrangement fees to a Buy to Let mortgage.
Applicants must be at least 18 years old at the time of application. The maximum age at the end of term is 70, this may be reduced depending on Anticipated Retirement date.
When assessing affordability we:
- use a customers net disposal income and rental income taking into consideration voids, tax and agents costs
- will use actual income received including guaranteed allowances i.e. housing, school fees, cost of living allowance etc. where income is tax free
- include cash, bonus and commission income
- will assess affordability based on Net Disposable Income and rental income (*)
- will need a full understanding of committed costs i.e. existing mortgage costs, HP, rent, school fees, private pension etc.
- will discount income that is not earned in Pounds Sterling by 10% to reflect currency fluctuation
(*) for foreign nationals with no right to reside in the UK we require a minimum 100% rental coverage assessed at our sensitised rate of interest.
See Acceptable income types for more information.
When possible we will consult credit reference agencies. We will not usually accept an application if there are any CCJ’s or Default’s relating to a mortgage, loan, overdraft or credit card.
We may show flexibility if the debt is connected to a utility bill, mobile phone, catalogue account or store card. This will be on a case by case basis and the customers overall financial profile. In all cases full details of the debt and reason behind the court action will be required along with confirmation it has been settled.
We will not lend to applicants who are Credit Impaired, undischarged Bankrupts or who have been declared Bankrupt in the past 6 six years.
A credit impaired customer is a person who:
- within the last two years has owed overdue payments in an amount equivalent to three months payments, on a mortgage, other loan or credit card (whether secured or unsecured), except where the amount overdue reached that level because of late payment caused by errors by a Bank or other third party; or
- has been the subject of one or more county court judgments, with a total value greater than £500, within the last six years; or
- has been subject to an individual voluntary arrangement or Bankruptcy order which was in force at any time within the last six years.