Our residential lending policy

The Society undertakes a thorough affordability assessment to ensure that we lend responsibly. How much you can borrow is calculated through a combination of your income, regular financial commitments and household / lifestyle expenditure and the term required at an agreed stressed rate to ensure that affordability still exists beyond the initial product rate.

In assessing affordability all unsecured loans / HPI agreements that have more than 6 months to run, credit cards and maintenance will be deducted. In addition, deductions to an applicant's disposable income will also be made for declared household and lifestyle expenditure which is compared against statistical data for accuracy. 

We request that you obtain accurate details of your applicant's income and expenditure which will ensure a more accurate calculation. We also recommend that prior to beginning a Decision in Principle that you have ran your clients through our affordability calculator to ensure that the loan is affordable.

If you have any questions regarding the use of the calculator please check our frequently asked questions section or alternatively contact our Intermediary Support team on 0345 602 2338.

Minimum age for applicants is 18. Maximum age for borrowers at the end of the loan term is 80.

• All applicants must have at least two years to serve.
• Where the applicant will also live in accommodation provided by M.O.D. then they must be able to support both the new mortgage and any associated living costs for the M.O.D. property. This must be factored into the affordability assessment.
• Where the applicant will be living in M.O.D. accommodation on a full time basis then the property to be purchased must be occupied by spouse/partner.
• Where it is a sole applicant purchasing the property it must be occupied on a full time basis. It must be plausible that applicant can commute to place of work on a daily basis unless on tour overseas.
• A 3 year residency history is required. BFPO addresses are acceptable.
• We will now accept applications where the source of deposit is from the government-supported Forces Help to Buy scheme which has now replaced the Long Service Award. Acceptance of the Forces Help to Buy scheme is subject to:
  • The Personal Information Note supplied to the applicant by the Ministry of Defence which details the conditions in which the loan is based must be provided with the application before a Binding Offer can be issued. This will detail the monthly payment and insurance premium to be paid.
  • The monthly payment and insurance premium to be paid by the applicant must be included as a monthly commitment for affordability purposes. This would be added as an unsecured loan to the online affordability assessment.

• Can accept cases where Bankruptcy, Sequestration, IVA or DRO have been discharged over 3 years, any less than that would be declined

• We will expect that the borrower's main residence is currently within the UK and that they will reside in the property whilst in the UK. We do not accept 'ex-pat' type scenarios where the applicant wishes to purchase a property in the UK and return at a later date.
• We will only consider applications where the applicant's spouse/partner or immediate family will be a permanent resident in the property. The property must not be left unoccupied for more than 30 days a year.
• If the applicant is required to pay for accommodation whilst working abroad then details of this must be disclosed during the application process and deductions made within the affordability assessment.
• We would normally expect to see salary paid into a UK bank account either direct or via transfer. The salary paid must be in UK sterling. We do not accept salary paid in any other currency as we do not currently lend for foreign currency loans (see below).
• The employer must be generally 'Blue Chip' for both UK and International companies.
• The max LTV for British nationals working abroad is 80%.

For those applicants who already have 1 or more investment mortgages we will consider up to 80% LTV on the basis that we receive:

• Evidence that the mortgage conduct on all investment mortgages is satisfactory with no missed payments. Sight of conduct via credit bureau data is acceptable.
• The rental income is to be input as income and the mortgage payment as a commitment to assess overall affordability.
• Where applicants have a significant investment portfolio (greater than 5) then we would also expect to have sight of their Buy to Let (BTL) portfolio summary.
• Please see 'Let to Buy' for those applicants who are looking to rent out their existing property and purchase a new home to reside in through the Newcastle.
• Our full Buy to Let lending policy is available here.

• Contract workers are considered higher risk to the Society due to affordability concerns once a set contract period has ended. For this reason we would be looking for a track record of employment within the same sector for at least two years. This can be evidenced via the last two P60s / SA302s and TYO or accounts.
• Applicants who have fixed term contracts within professional occupations such as Doctors, Teachers and Solicitors, will be regarded as in permanent employment. Applicants from contract workers in other fields will be considered on their individual merits.
• We require sight of current contract confirming income and duration and copy of previous contract. There can be no more than a six week break in between contracts. The current contract must be a minimum of one year with at least six months still to run at time of application. If less than three months left to run then evidence of a new contract is required.
• If applicant is PAYE (including IR35), income will be taken from the lower value of the latest contract or average of the last three months' payslips. In addition, one month's corresponding bank statement is required along with evidence of two year track record.
• If applicant is self-employed, income will be taken from the latest contract. The last three months' business bank statements will be required to confirm income is in line with the contract, along with evidence of two year track record.
• Contracts quoting a daily or weekly rate should be based on an assumed 46 week period for annual income.
• Applicants employed through recruitment agencies will not be accepted unless a two year track record in the same line of work can be established. Those employed under zero hour contracts will not be accepted.
• IT contractors can be considered as long as a track record within the Industry can be established. This may be evidenced via previous contracts in conjunction with P60's.
• Zero hour contract workers will not be accepted, with the exception of Teachers and Medical Professionals employed via employment agencies.
• CIS workers must have a two year track record. This can be evidenced via accounts or SA302s and matching Tax Year Overviews. Income will be used from the latest accounts or SA302s. Accounts must be prepared by a suitably qualified Accountant - refer to our self-employed policy for this. Three months business bank statements will also be required.

As part of our overall assessment, the Society will credit score all mortgage applications to assess the credit worthiness of applicants. 

Applicants will be credit scored at Decision in Principle stage.  This is a soft search and will not leave a footprint on their credit file.

The credit score will either accept, decline or refer applications to our lead underwriters for a manual assessment.

We offer Custom Build mortgages exclusively via BuildStore Mortgage Services who can be contacted on 0345 223 4888. Alternatively, visit their website www.buildstore.co.uk for more details. We offer Custom Build mortgages on the following basis:

• Purchase of land and traditional custom build projects
• Renovation and conversion projects
• Property types including terraced and semi-detached houses subject to an overall site assessment and input from panel valuer. Flats will not be considered at this stage.
• Traditional construction types will be considered. Modern methods of construction will also be considered subject to panel valuer input and suitable warranty and accreditation requirements.

We will consider lending up to a maximum of £1,000,000, however, this will depend on the LTV at the end of the build and loan to costs during the build. Please refer to the below:

• £0 to £500,000 up to 90%
• £500,001 to £750,000 up to 85%
• £750,001 to £1,000,000 up to 80%
• Interest Only can be taken during the build but can only be extended beyond build completion where there is a repayment strategy that meets our criteria and LTV does not exceed 75% / 80% part and part
• Minimum property value of £100,000 based on full completion
• Funds are released on a stage payments basis

Please contact BuildStore to discuss your requirements in full.

• If any active debt management is identified the case would be declined. If any debt management is shown on the credit report as settled and it was less than 12 months ago case would also be declined.

The Society will use credit scoring to determine whether to proceed with an application. Applications will normally be declined in the following circumstances:

• Current secured arrears (this means you’ve missed mortgage payments and have payments overdue) or recent history of non-payment
• Current unsecured arrears (this means you’ve missed mortgage payments and have payments overdue) or history of delinquency in last 3 years
• Any type of unsatisfied CCJ or default irrespective of amount (£)
• Any secured or unsecured credit related CCJ or defaults within the last 3 years irrespective of when registered
• Any insolvency i.e. Bankruptcy / IVA / DRO is detected that has been discharged for less than 3 years
• Any evidence of previous or current property being repossessed
•  Our underwriters may be willing to accept a maximum of 2 satisfied defaults below £250 from utility companies, communications or mail order with satisfactory explanation within the last 3 years. This is subject to the case being good quality overall.

You can register and submit a residential DIP via our Intermediary website www.newcastleis.co.uk.

By registering online, you will set up your unique login details and, once approved, join our panel of advisers. We will aim to review your registration within two working hours of you applying (Monday to Friday 8am to 6pm).

Once you have been accepted, you will be able to log in and get an instant decision in principle, confirming whether a client has been approved for a mortgage with us, as well as manage DIP cases you have submitted online.

On completion of the DIP, you can now progress to full application and also submit supporting documentation via our document upload facility.

Where an applicant has been employed for less than 6 months we may require sight of the employment contract. 

This is instead of an employment reference which can often lead to delays in processing the application.

If we deem it necessary, we may approach the employer for a more detailed response

Details of employment history for the past 12 months is required if the applicant has been with their current employer for less than 6 months or they are currently in a probationary period.

Where it has been established that the property is to be purchased at a discounted price then we can consider lending 100% of the purchase price subject to valuation.

Additional borrowing above the discounted purchase price can only be considered subject to funds being for home improvements only.  No capital raising for repayment of debt is allowed.

The acting solicitor must ensure that defective title indemnity insurance is arranged where a discounted purchase price is taking place. This protects the Society from future claims under the Insolvency Act.

The current occupant of the property would be expected to move out of the property. We will not accept a sitting tenant and the property must be vacant on completion with no charges /restrictions from previous owner remaining.

Maximum loan is £500,000.

We will no longer accept mortgage applications where a salary paid in a currency other than UK sterling is to be used for affordability purposes.

In addition, we will no longer accept other sources of income that are not UK sterling based i.e. rent received from overseas properties, overseas investments.

Where the loan is interest only or part interest only / part capital repayment (currently not available) we will not accept a repayment strategy that is based on assets that are held outside the UK.

• All EU/EEA/Swiss citizens (excluding Republic of Ireland) applying for a mortgage must currently reside in the UK and have a settled status. Alternatively, a pre settled status would be acceptable if another party on the mortgage is a UK citizen, has permanent right to reside, or has settled status.
• We can accept sole or joint applications where both parties have pre-settled status up to a max LTV of 80%. Applicants will need to provide evidence of settled/pre settled status, to do this the applicant will need to provide a share code (which can be obtained from the Government website) which can be used by the Society to view their immigration status online.

The maximum LTV for Non-EEA Applicants is 80% but we may consider applications above this on referral to our lead underwriters via a Decision In Principle.

All non-EEA nationals must be able to demonstrate that they have settled status in the UK. Alternatively, professional applications may also be considered where there are at least 2 years remaining.

The following Visas are acceptable for non-EEA applicants;

• Family Visa (Spousal) – acceptable if related to an EEA settled status applicant, but we will not consider their income
• Skilled Worker and Health Care Worker visas

The following is not acceptable:

• Short term visas

If your client has an existing mortgage and wants to borrow more / port their mortgage to a new property they currently need to speak to us directly. They can do this by:

• Calling us on 0345 606 4488 (Lines are open 8am - 8pm Monday to Friday and 9am - 3pm Saturday)
• Visiting their local branch. View our branch finder for details of their nearest branch
• Visit the existing customers section of this website

We currently do not accept new mortgage applications that require a guarantor.

The following information is required in support of a mortgage application:

The Society will initially attempt to identify all customers electronically by using software which checks a series of databases for identification information. This search does not affect your client's credit rating, however in some cases we may find it necessary to request paper identification to prove name and/or address. Where required, any documents can be provided using our document upload facility.

Applicants must supply proof of residence. Any utility bill, council tax bill, bank statements or mortgage statements are acceptable, provided confirmation of sight of the original documents is supplied and they are from within the last 3 months.

The Society will be required to confirm identity. Acceptable documents include a passport or driving licence photo-card.

Intermediaries are responsible for ensuring that an applicant's identity and proof of residency are verified as part of the application process.

Applicants must normally have been resident in the United Kingdom for a minimum period of 3 years. This can be waived for a member of HM Forces, or employees of internationally based companies, providing their family will be resident in the property.

All applicants (EEA & non-EEA) who have not resided in the UK for at least 3 years will need to be referred to an underwriter for assessment.

Non-EEA nationals will require evidence of indefinite leave to remain in the UK.

The following visas are acceptable for non-EEA applicants:

• Family visa (Spousal) – acceptable if related to an EEA settled status applicant or British national, but we will not consider their income
• Skilled Worker and Health Care Worker visas

The following is not acceptable:

• Short term visas

The following sources of income are acceptable:

Primary taxable income (100%)

• Basic income
• Private pensions and annuities
• Car allowance
• Pay rise pending (must be within 3 months and employer to confirm)
• Housing allowance
• Additional investment income from rental portfolio (evidenced by accounts / tax assessment / accountant's reference)
• London / Large City allowance
• Shift allowance (Guaranteed)
• Child Benefit – latest month’s bank statement will be required

Primary non taxable income (100%)

• State pension / Pension Credit
• Guaranteed for Life DWP
• Maintenance Order (CSA / Court Order enforceable)
• Limited company director dividends (net of income tax paid)

Secondary taxable income (50%)

• Regular overtime / bonus / commission / shift allowance
  (2 years' P60s will be required to evidence track record)
• Second Job with at least 12 months' service
• Territorial Armed Forces pay

Secondary non taxable income (50%)

• Working family tax credit / Family tax credit / PIP (where applicable)

We will accept 50% of:

• Second job with 12 months service

We will not consider:

• Universal Credit
• Unemployment Benefit / Income Support
• Housing Benefit
• Social security payments that are not guaranteed for life
• Seasonal work
• One off payments
• Gratuities not sighted on payslips
• Bursaries and scholarships
• Investments (incl. SIPP) or Trust Income that is not guaranteed

Where a reduction in income is anticipated in the near future then the impact of this must be considered for affordability purposes. This would normally include applicants who are close to retirement, those that are on or due to go on maternity leave or those that are looking to reduce working hours.

We would expect that any future changes to income are confirmed on the application we receive so that this can be taken into consideration by our underwriters.

Where applicants are on or due to go onto family leave then we will require details of the date they are expected to return to work, the basis on which they will return (i.e. Part time / Full time) and the new salary on return to work. This will need to be verified by the applicant’s employer.

Employed

For basic income:

• 3 full month payslips (dated within the last two months) per applicant. Where paid weekly, 3 full months equates to 12 weekly payslips AND;
• 1 month's personal bank statement per applicant. Must show corresponding salary credits being received.

For periodic bonuses and commission:

• P60 or payslip showing any bonuses received over the last two years.

 Self employed (Sole Trader / Partnership/LLP) 

One of:

• Completed accountant's certificate (NBS to request this)
• Last 2 years' SA302s and corresponding Tax Overview forms
• Last 2 years' accounts completed by a suitably qualified accountant.

Due to the COVID-19 pandemic, we have seen many self-employed businesses restricted in their trading.

Currently, we require 3 months' company bank statements (the most recent available) to support evidence of trading income.

Limited company (25%+ in shareholding)

One of the following:

• Last 2 years' accounts or
•  The last 2 years’ SA302s and corresponding Tax Overview forms, or
• Completed accountant's certificate (NBS to request this)

Due to the COVID-19 pandemic, we have seen many self-employed businesses restricted in their trading.

Currently, we require 3 months' company bank statements (the most recent available) to support evidence of trading income.

Note: for limited company directors where affordability is based on dividend income we will require sight of last two years' HMRC tax assessments (SA302s) and corresponding Tax Overview forms.

We would only consider using a share of net profit when three years of accounts can be evidenced and show a steady increase in profit. This is at the discretion of the underwriters.

Repayment types that will not be considered are:

• Interest only with no repayment vehicle
• Lump sum payments during term other than pension (note we allow this for large loans given customer profile earning large bonuses)
• Sale of other assets
• Inheritance
• Sale of a property that is currently tenanted by a family member

Joint mortgage, sole proprietor applications are acceptable. The scheme essentially allows one occupying borrower to be supported by additional income from a family member who will be party to the mortgage but not be named on the title deeds.

Loans will be considered on the following basis in addition to standard requirements:

• Available for residential properties only. Not available for BTL applications
• Maximum of two borrowers
• Minimum loan amount £25,000 up to a maximum of £1,000,000 (subject to product terms and conditions)
• Maximum LTV 95%
• Affordability will be calculated using combined income from the occupying and non-occupying borrower
• Loans will be available on a repayment basis only
• Additional borrowing for home improvements can be considered, debt consolidation is not permitted
• Minimum age for the borrower is 18 years
• Maximum age is 80 years at the end of the mortgage term based on the oldest applicant
• A family member is defined as a close family relative, normally a parent or step parent.
• Both applicants must be employed/ self-employed / in receipt of pension income.

The non-occupying borrower should obtain independent legal advice given the nature of the product and joint and several liability for the debt while having no ownership rights over the security property.

In order to obtain an illustration on behalf of your client, please source from either Trigold or Mortgage Brain. Currently the society is unable to produce an illustration for your client.

Loan to Value (LTV)

 Our maximum LTV is set out in the table below:

Income multiple caps

Our maximum income multiple is set out in the table below:

Overtime / bonus / commission income

We can take up to 100% of frequent payments (Overtime / Bonus / Commission) where:

• Paid Monthly as evidenced on last three months consecutive payslips AND;

• Year to date earnings on payslips must show these payments have been consistent.

We can take 100% of less frequent bonus payments where:

• A two year track record is available via the last two P60s;

•Gross income, including bonus, must be in excess of £100,000.

Repayment options

We can accept Interest Only loans where:

1. Maximum LTV on Interest Only is 75% with maximum of 80% overall (subject to maximum loan size / LTV above);

2. We will accept Downsizing via Sale of Property where Interest Only exposure is capped at 60% LTV and must have a minimum of £250,000 equity on completion in London/South East regions and a minimum of £150,000 equity on completion in all other regions.

Any additional LTV up to 80% would need to be on capital repayment, we cannot accept any other repayment strategy; and

3. All other acceptable forms of repayment would need to match current lending policy, this includes:

• Endowment Plan(s) using the midpoint projection
• Pension Plan(s) where term cannot exceed retirement age
• PEPS
• Investments (ISA's / Bond's / Unit Trusts)
• Share portfolio where current value of portfolio is sufficient to repay loan
• Regular bonus payments (bonus must be established as part of income verification)
• Sale of investment property
• Regular overpayments (either monthly or via periodic lump sum repayments)

Newcastle Building Society has a partnership with the UK's leading conveyancing panel management specialist LMS.

LMS provide conveyancing services to the Newcastle supporting the application process for broker customers.

Where our products are offered on a fees assisted basis (where a fees assisted legal transfer is included in the features of the product) LMS will provide the conveyancing service. In addition LMS are also able to provide a low cost fee paying service. For details of the costs involved please refer to the fees brochures by clicking here.

Should your client wish to use their own solicitor/conveyancing firm in the purchase or remortgage of their home, it is important to note that included in the Society's Panel Acceptance criteria is the requirement for multiple partners.

Sole practitioners are not accepted to our panel and any request will be rejected. Where sole practitioners are instructed they may act for your client however we will instruct LMS to act on behalf of the Society. In order to provide this service there will be an additional charge.

If the proposed conveyancing provider is declined, a customer can select any other solicitor, including LMS appointed firms from the panel without incurring additional Society fees.

• Lending into Retirement is where the Borrower is not retired at the point of loan origination, but there is a likelihood that retirement will occur whilst part of the loan is still outstanding.
• The maximum mortgage term will be based on the oldest applicant turning 80.
• Where the mortgage term extends into retirement (lower of either 70 or declared retirement age), the following will apply:
  • Retirement is more than 10yrs away:
    Current income used for affordability purposes however, suitable evidence that the applicant is currently paying into a private/employer pension plan must be provided. This can include payslips evidencing pension contributions or a pension statement (latest annual statement must be provided).
  • Retirement is less than 10yrs away:
    Affordability will be based on the lower of the current income or future pension income. Evidence of future pension income will need to be provided in the form of the latest annual pension statements showing projected figures.
• Alternatively, a Plan B approach can be considered where there is suitable justification to do so. This might include an understanding of the plan such as the below and we may seek to understand whether the timing of this could be brought forward should circumstances require.
  • Pensions/investments. Please note we can only consider the 25% tax free lump sum from self-invested personal pension.
  • Sale of another property. For example a buy to let or second home.
  • Downsizing of the mortgaged property. Please note we are only able to accept this as a suitable Plan B for an interest only mortgage and we may seek to understand whether the timing of this could be brought forward should circumstances require.
• Self-employed applicants may indicate that they intend to work beyond their 70th birthday. We will consider those circumstances on their individual merits.

Let to Buy is where the borrower is not redeeming the mortgage held on their existing property and is looking to let this out whilst purchasing a new property as their main residence

Loans will be considered on the following basis:

• We obtain consent to let from the existing lender or a copy of the new BTL offer
• We obtain evidence from 1 registered ARLA / NLA letting agent of expected rental income
• If the confirmed rental income covers the mortgage payment in full, the rent and commitment do not need to be input. If there is a shortfall, this needs to be added as a commitment.
• Where the rent received does not pass the stress test then the shortfall will be taken as a monthly commitment for affordability purposes.

We will consider loans above 80% LTV on referral to an underwriter via Decision in Principle.

We will also consider applicants who are looking to remortgage a property already mortgaged to Newcastle Building Society onto one of our Buy to Let schemes and purchase a new residential property to be mortgaged through ourselves.

Minimum/maximum loan amounts are product specific.

Minimum mortgage advance is £10,000 (or £1,000 for further advances), maximum advance is £1m. Loans over £500,000 will require underwriter approval at Decision in Principle.

The Society makes mortgage finance available for:

The purchase of residential properties for owner occupation, including the purchase of residential properties for a family member to reside in. Normal criteria caps lending at 95% loan to value inclusive of fees.

Remortgages:

• 95% maximum LTV. Can borrow more than owe current lender, subject to the following rules: Home improvements – estimates not required up to 80% LTV.
  Over 80% LTV – requirement for estimates is at the discretion of the underwriter.
• Remortgage fees can be added to the loan if the final LTV does not exceed 95%, product terms permitting.
• Capital raising is not allowed for business use, currency speculation or to repay gambling debts. The maximum LTV is 80% for all applicants.

Minimum repayment term is 2 years with a maximum loan term of 40 years.

A new build property can be classed as:

• A property being occupied for the first time in its current state
• A refurbished property (existing residential unit(s)) being occupied for the first time it in current state
• A converted property (re-development of non-residential unit(s)) to residential unit(s) being occupied for the first time in its current state.

Maximum permitted LTV will be dependent on;

• The presence of Builders Incentives
• Whether the property is a new build house or new build flat as follows:
  
  – The minimum acceptable lease term on new build properties is 85 years. This includes shared ownership.
  – The maximum starting ground rent on all new build properties with a leasehold tenure is limited to 0.1% of the property value.
• Ground rent must be reasonable at all times during the lease term. For example, ground rent escalation should be linked to RPI (Retail Price Index) or a similar index, and unreasonable multipliers of ground rent will not be permitted, for example doubling every 5, 10 or 15 years.

New build houses

• The maximum loan to value for new build houses is 90%.
• The maximum loan to value for new build flats is 80%.
• Where incentives exist, we allow up to 5% incentives including deposit contributions, cashbacks, legal costs, stamp duty without deductions from the purchase price. Costs that don't have a material impact on the value of the property such as white goods, carpets, curtains are not treated as incentives.

New Build Flats

The maximum loan to value for new build flats is 80%.

Incentives

• The CML Disclosure of Incentives form that must be completed by the developer and presented to the valuer on site. If this is not seen, a nil value is returned on the valuation form.
• For LTV calculation purposes we will accept up to 5% of the purchase price for Builders Incentives
• For clarity, an incentive is defined as any cash or goods received from the builder or developer

All New Build properties must have a home warranty scheme applied. The acceptable schemes to the Society are:

• NHBC
• Build-Zone
• LABC
• Zurich Municipal
• HAPM
• Premier Guarantee
• BLP
• Protek
• AHCI Advantage
• ICW (International Construction Warranty)
• Checkmate Castle 10
• Checkmate Knight 10
• Aedis Homeproof New Build 10 Residential Warranty
• Aedis Homeproof New Build 10 Residential Warranty for Self Build
• Professional Consultants Certificate

Please note that we do not accept assignable contracts in any form.

New Build Variation - First HomesFirst Homes are a new form of affordable housing, sold to first-time buyers at a discount of at least 30% against the market value that remains attached to the property in perpetuity. Local Authorities may choose to apply discounts up to 50%.

After the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London). First Homes will be for first-time buyers only, and councils will be able to prioritise them for local people and for key workers.

• Max LTV 95% of discounted purchase price
• Homes are purchased under a s106 agreement, which restricts the purchase to local first time buyers
• Homes will be sold at a typical discount of 30% below market price for this purchase. The same discount will apply to any subsequent sales
• Authority to Proceed document will be required issued by the Local Authority
• Further advances can be considered subject to usual LTV restrictions against the market value minus the applicable discount
• Can support the subsequent purchase or remortgage of a First Homes property if LTV restrictions are applied to the appropriate discounted market valuation

All other aspects follow the standard new build lending policy detailed above. For more information on First Homes, click here. 

New Build Variation – Deposit Unlock

The Deposit Unlock new build scheme supports applications on new build properties at an LTV of up to 95% supported by a Lender Insurance Scheme.

• Maximum purchase price is £600,000
• Maximum loan amount £570,000
• 5% deposit required from applicant/s
• Incentives as defined above for standard new build policy are not acceptable with the exception of some 'Homemover' costs
• 1 bed flats and studio flats unacceptable. Other property types acceptable in line with standard policy
• Lender Insurance Scheme required
• Further Advance not acceptable
• Property exposure limit is maximum of 20% of any site

All other aspects follow standard new build lending policy detailed above..

Maximum number of applicants is 2.

• Subject to a 2 year track record we can consider 50% of an average of the last 3 months pay slips. Last 2 years P60s would also be required to show the track record of earning this income at a similar level.
• Applicant must be permanently employed by NHS for main job with bank work used as an extra income only.

Applications will be referred to our underwriters for review in the following circumstances:

• 1 or more pay day loan taken out in the last 6 months
• 2 or more in the last 12 months

Where there is track record of applicants taking pay day loans frequently over the 12 month period then the underwriters reserve the right to decline the application.

If you have an existing mortgage and want to borrow more or port the mortgage to a new property, you will need to speak to us directly. You can do this by;

• Calling us on 0345 606 44 88 (Lines and live chat are open 9am - 6pm Monday to Friday)

We will consider loans from applicants currently in a probationary period. This is normally subject to a 12 month track record in the same line of work.

For applicants employed within the Police Force will normally have a minimum 2 year probationary period. We will accept loans where the applicant has been employed in role for at least 12 months.

• For contracted applicants we will require a copy of the applicant’s current contract and it must have at least 1 year still to run.
• Where applicants are self-employed then we require 2 years' trading accounts and the last 2 years' HMRC Tax Assessments and corresponding Tax Overview Forms.
• For applicants who are coming towards the end of their professional career and especially for sportspersons, documentary evidence will be required to establish how they intend to support the mortgage post-career.
• There is no restriction on age or term other than normal policy guidelines.

• All residential properties must have a minimum purchase price or valuation (whichever is lower) of £50,000
• All buy to let properties must have a minimum purchase price or valuation of £75,000 and a minimum loan amount of £25,000
• Properties in Scotland still require a transcript of existing report from the applicant on the proviso that the valuer is on our panel and the transcript is completed on NBS papers. Alternatively, we will instruct our panel valuers.
• The tenure of acceptable properties will be freehold or leasehold in England and Wales, or their Scottish equivalent.
• All properties must be assessed by a suitably qualified valuer with sufficient professional indemnity cover. All valuation instructions (with exception of Scotland) will be made by the Society via our nominated panel. Third party instructions are not acceptable.

We accept applications on a repayment, interest only or part interest only basis.

• Maximum loan amount up to £500,000.
• We will consider lending 100% of the discounted purchase price as indicated in the offer agreement between tenant(s) and Local Authority / Housing Association.
• We will also consider lending additional funds up to a maximum of 80% LTV of open market value subject to funds being used solely for home improvements.
• It will be a requirement that estimates for the works to be carried out are received prior to us instructing the valuation. We will consider lending up to £5,000 maximum upfront to fund immediate home improvements as long as any additional funds are retained until all works completed and a re-inspection confirms.
• It will be a condition of the mortgage that any additional funds in excess of the discounted purchase price will still rank higher than the Local Authority's charge on the property.
• Under no circumstances will we lend additional funds for capital raising including payment of fees to any solicitor or third party.
• Only the applicants named on the Right to Buy offer agreement can be named on the mortgage.
• The Society's charge should always be registered as first priority ahead of any Local Authority.
• The valuer must confirm that there is a ready and sustainable demand for the property to be mortgaged. In addition, the valuer should look to confirm that there is at least 50% private ownership within the immediate vicinity.
• Flats will be considered as long as they adhere to current policy i.e. no high rise flats, maximum 5 storeys. Note that maximum LTV would be 75% of the open market as per our standard criteria for ex local authority flats.
• Further advances will be considered subject to all funds being used for home improvements within the discount period.

Second homes / holiday homes must be strictly for the sole use of the borrower and dependent family members and must not be let. 

The maximum loan to value for such properties is 75% and the applicant's financial status must be sufficient to cover both loans where we will deduct the applicant's main mortgage as a monthly commitment. Maximum loan is £500,000.

We offer Self Build mortgages exclusively via BuildStore Mortgage Services who can be contacted on 0345 223 4888. Alternatively, visit their website www.buildstore.co.uk for more details. We offer Self Build mortgages on the following basis:

• Where applicants wish to buy land and build a new property
• Where applicants are renovating an existing property
• Where applicants are converting an existing structure for residential purposes

We will consider lending up to a maximum of £1,000,000, however, this will depend on the LTV at the end of the build and loan to costs during the build. Please refer to the below:

• £0 to £500,000 up to 90%
• £500,001 to £750,000 up to 85%
• £750,001 to £1,000,000 up to 80%
• Funds are released on a stage payments basis
• Interest Only can be taken during the build but can only be extended beyond build completion where there is a repayment strategy that meets our criteria and LTV does not exceed 75% / 80% part and part
• On completion of the build, following receipt of completion certificate we will allow borrowers to transfer to a standard residential product and waive any Early Repayment Charges applicable
• It is expected that the build is normally completed within 2 years

Please contact BuildStore to discuss your requirements in full.

• Self Employed applicants must have been trading for a minimum of 2 years to accurately assess track record within chosen line of work. Where applicants do not have 2 years trading it will be at the discretion of the underwriter to approve.
• The income level to be used will be based on the average of last 2 years net profit. Where profits have declined in the last 12 months then we only use the most recent year to assess for affordability. We may also require a projection from the applicant's accountant to ensure that this trend is not continuing.
• Where net profit has declined in consecutive years or drawings continue to exceed net profit then the application will be declined.
• Applicants who have more than a 25% shareholding in a limited company will be classed as self employed for our purposes and 2 years accounts will be required. Income will be assessed by using salary paid and either dividends received or applicants share of net profit. Note that for our affordability model we require the dividends received to be net of any income tax paid. Please obtain this information from applicants SA302's.
• For applicants who have less than 2 years track record as self employed, we can offer one of our special Self Employed products. These are available subject to:
  • Maximum LTV of 80%
  • At least 1 years full accounts available
• In addition to the above requirements, we are currently requesting the last 3 months' business bank statements for all self employed applicants, which must clearly demonstrate current trading levels.

• Applicants must have continuous employment with the firm for a minimum of 2 years. This can be in the form of employment or a shareholder.
• Income will be assessed using an average of the last 2 years (or latest year if lower). If the applicant has not been a shareholder for 2 years, we can request P60s to evidence the employed income.

The level of income verification for LLP applicants is as follows: 

• Letter from HR/Finance Director confirming the remuneration for each of the last 2 years
• Confirmation that there are no business loans included in the figures
• Last 2 years SA302’s and corresponding Tax Year Overviews or P60s if not a Partner for 2 years
• Latest month’s personal bank statement showing income being received.                  

• Borrowers must be a resident in the UK
• We only consider lending under this scheme in England
• Maximum household income level is £80,000 or less outside of London and £90,000 or less in London
• Maximum loan is based on affordability. Maximum loan amount is 95% of the borrower’s share
• The minimum share of the property to be purchased is 25% and the maximum is 75%
• The borrower must contribute at least 5% deposit from own funds or via family gift
• Property must be Leasehold and loan must be on a repayment basis
• Borrowers must not have any interest in another property anywhere else in the world
• Borrowers cannot sublet their Shared Ownership home
• Standard concentration limits apply
• Should the property be down-valued when valuation obtained for mortgage purposes, loan amount will be reduced accordingly
• For affordability purposes, the rental payment and any ground rent and service charges need to be confirmed
• If the property is new build, standard new build policy applies including aspects relating to suitable warranties. Incentives as defined in the new build policy are not acceptable
• Shared Ownership cases must follow the ‘Model Lease’ format only. The lease must meet the Society requirements and must allow an adequate mortgage protection clause that protects the Society from losses in the event that the property is taken in to possession, or achieved by way of a suitable Deed of Postponement / Priority. The Mortgage Protection Clause must cover the initial loan and all additional lending / staircasing up to 100%
• Arrangement must be through a registered Housing Association or Registered Social Landlord

• The deposit must come from the applicant's own resources. Gifted deposits from parents and other close family relatives will be allowed subject to there being no repayment vehicle in force and the underwriter being happy with the arrangement.
  
  In all instances we will require a signed copy of our Gifted Deposit Form which can be downloaded from our useful documents section. This form should be sent with supporting information when you apply for the mortgage.
• Where the source of the deposit is confirmed as 'savings' the Society reserves the right to see documentary evidence of the deposit prior to completion. Crypto currencies such as BitCoin are not considered an acceptable source of deposit.

With effect from 1 September 2023 our current Standard Variable Rate is 6.94%.

• Proposed security is attached to a property already owned by the applicant.
• Annexes with own separate access and/or not used by the applicant or a family member.
• "Flying-freehold" - if more than 25% of property involved.
• Houses with rooms let or likely to be let to several tenants where premises have not been converted or constructed for this purpose.
• Properties where the unexpired lease has less than 85 years remaining on completion.
• Unmodernised flats and flats which are above commercial premises. Exceptions can be made for exclusive developments and certain areas of larger British cities where the valuer has confirmed that there is a ready and sustainable demand.
• Studio flats are normally unacceptable but may be considered in prestigious developments where a ready and sustainable demand exists. This is subject to valuer's comments.
• Large old unmodernised houses where accommodation is in excess of the applicant's requirements, particularly where there are attics and/or basements.
• Back to back houses.
• Council houses built in a non-traditional way, i.e. prefabricated reinforced concrete.
• Ex Local Authority flats where LTV will exceed 75% (except in Scotland).
• Freehold flats with the exception of 'Tyneside Flat' style or where the application will own a share of the freehold with a management company in place to oversee the maintenance of the building.
• Houses with restrictions to ownership (e.g. retirement flats, restrictions on occupation to local inhabitants). This list is not exhaustive and any application where there is a restriction should be referred to an underwriter.
• Properties with any agricultural restrictions.
• Houses under shared ownership / equity where a sales restriction / charge will remain on the property despite the borrower owning a 100% share.
• Mobile homes or caravans.
• Houseboats.
• Uninsurable properties e.g. due to flood risk.
• Uninhabitable properties (e.g. no kitchen/bathroom/roof/mains services not connected).
• Properties with invasive plants (i.e. Japanese Knotweed) within the immediate curtilage of the property.
• Flats with a shared balcony (deck access).
• Timber framed properties are acceptable if constructed with an outer skin of brick/stone or rendered blockwork: other types of outer skin such as timber cladding are not acceptable. Please refer to lender for further guidance.

Alternative or additional fees may be charged for special schemes, please refer to specific product pages for details.

* All of the above fees include an administration fee to the Society of £112.50.

Please note, for remote properties, further charges may apply for reasonable travel expenses incurred by the valuer in order to carry out an inspection.