COVID 19 – Interim Changes to Lending Criteria

To ensure that the ongoing impact of COVID 19 (Coronavirus) is factored into our lending decision the following additional requirements apply when submitting new mortgage applications for your clients.

Please be assured that we are doing everything we can to regularly review our criteria and maintain the best possible service to you during this time.

LENDING CRITERIA

If you want to see all our lending criteria please click here

Affordability
All Applicants

We require the last 3 months bank statements to assess income and expenditure.

Employed (Previously Furloughed)

Any applicant who has previously been furloughed must have a minimum of 1 month at pre-pandemic salary.

We require the last 3 months payslips to evidence current income and that this has returned to pre-furlough amount.

Employed (Furloughed)

We will consider applicants who are currently furloughed under the Government’s Coronavirus Job Retention Scheme by exception only.

ALL EMPLOYED CURRENTLY FURLOUGHED CASES WILL BE SUBJECT TO MORTGAGE CREDIT RISK COMMITTEE APPROVAL

Bonus, Overtime and Commission

Bonus – maximum of 50% averaged over the last 2 years;

Overtime – maximum of 50% averaged over the last 3 months;

Commission – maximum of 50% averaged over the last 2 years;

Where any elements of a borrower’s income are reducing, including overtime, commission and bonuses the lower amounts will be used in the affordability assessment.

Self-Employed

We require a minimum of two years trading supported by SA302s and corresponding tax overviews, plus finalised accounts. We will require, where available 2020/21 accounts or tax assessments.

Where the applicant(s) have experienced a reduction in trading and therefore have been negatively impacted during 2020/21 we can consider excluding the latest trading information from the detailed income assessment but will require the following:

  • The previous 2 years accounts/tax assessments (2018/19 and 2019/20);
  • A projection for 2021/22

In addition, confirmation in writing will be obtained from the applicant’s accountant of the following:

  • That the company is still trading;
  • How (if at all) the company has been impacted by COVID 19;
  • If impacted by COVID-19 what impact this has had on profitability;
  • If the clients have applied for any of the Coronavirus Support Schemes, whether they were accepted and whether the grant funds were needed to continue to trade.

If the applicant(s) do not use the services of an accountant we will require the following additional information:

  • Evidence of current level of trading;
  • 6 months business bank statements

ALL SELF-EMPLOYED CASES WITH EVIDENCE THAT THEY HAVE BEEN IMPACTED BY COVID-19 WILL BE SUBJECT TO MORTGAGE CREDIT RISK COMMITTEE APPROVAL

Process
As part of your DIP submission, we will ask you to complete a supplementary Coronavirus declaration for your applicants. It is vital that if at any stage your applicant’s circumstances change you immediately inform the Society so we can assess how this affects their application / offer. We will confirm with you immediately prior to offer whether there has been any change as a result of COVID-19