| Basic lending criteria | ||
Minimum age 18. Maximum age 99. Some lenders restrict lending to age 65. Up to 4 applicants (more for investment lending). Deposits can be gifted where it is confirmed the gift is never repayable. New build property is on a case by case basis, and some lenders impose considerable restrictions. Income multiples are very approximately 2.75xjoint income or 3.5x sole income but this varies widely. Interest only has been restricted by many lenders to 75% max. Foreign nationals will usually be required to have at least 1 year left on a working visa. Maintenance can be considered by some lenders. Second jobs can be considered. Existing debts are usually accounted for by taking the annual cost from income before applying income multiples. For credit cards 5% of the balance is usually taken as the monthly payment. Overtime, commission and other non basic elements can be allowed particularly where there is a track history. Self build property can be considered, where funding is released as a series of c4 stages. Fixed term contract workers are assessed on a case by case basis Self employed applicants may be asked for income proof in the form of 6 months or more accounts, or Tax assessments or possibly just evidence of income flow such as Bank statements or recent trading invoices. Self cert mortgages are available for those who have difficulty in proving income for genuine reasons. Applicants will have to sign to confirm their income level is accurate and likely to be sustainable. Second homes can be considered where the first is to be let out or the new property is to be used as a work base or home for a relative or holidaying. Properties of non standard type can be considered, to include flats over shops, barns, concrete homes, high rise flats, semi business use, steel or timber framed, lath and plaster, listed buildings etc. Adverse credit history can include arrears, defaults, CCJ’s, Bankruptcy and other sub prime events. Lenders will be looking for reassurance that any new loan is sustainable. Builders cash backs can be considered but very much on a case by case basis. Where lenders suspect the second hand value (i.e. – without cash back on offer) is less than the brand new value, allowance will be made to try and ensure the lender is not left out of pocket should the property be repossessed. Buy to let mortgages are assessed in many ways, but as a very general rule the rent should cover the mortgage payment by at least 125%. Some lenders will take earned income into account. HMO’s can be considered where all relevant laws and regulations have been complied with, such as fire and escape facilities. Relatives can sell at a discount to one another in which case the buyer will not need a deposit. Older borrowers can be considered with care, but they must ensure they can maintain payments ongoing. Equity release schemes involve no payments back whilst the applicant is alive. Right to buy is available and some lenders may allow additional borrowing over and above the purchase price. Of prime importance is property type as some lenders for example will not lend on flats or house with flat roofs. Guarantors can be considered where the lender perceives the guarantor is on a sound financial footing and able to meet their new and existing obligations. Government schemes such as shared equity and key worker deposits, tend to be for clients with good credit history and status. Long term mortgages are available up to 50 years. Probation – employees on probation can be considered on a case by case basis. Newly self employed applicants can be considered, with some lenders even allowing 1 day trading, although a minimum 6 months trading is more usual. Couples buying together will both be assessed for credit status, even where one is not working unless only one party applies for the Mortgage. |