• Residential lending criteria

    We are not considering applications outside of this criteria.
    Click below for full details of our criteria,

  • The Application

    Advice

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

    Minimum Loan

    • £30,000

    Maximum Loan

    • £500,000 (subject to a maximum HLC of £50,000)

    Term

    • Maximum 40 years

    Interest only

    • Allowable up to a maximum of 80% LTV. Any borrowing over 80% must be on a capital and interest repayment basis.
    • We require in writing, a description of the repayment vehicle to repay the mortgage at the end of the mortgage term.
    • We require the repayment vehicle to have been in place for 6 months before the mortgage application is submitted.
    • Where an investment based vehicle is in place, we will check that the estimated maturity/projected investment value of the repayment vehicle provided is at least 100% of the loan amount (using the assumed ‘middle growth rate’).
    Examples of acceptable repayment vehicles
    • Endowment
    • Cash lump sum from personal/occupational pension plan
    • Equity ISA
    • Sale of investment property or second home (see below)
    Examples of unacceptable repayment vehicles:
    • Downsizing
    • Conversion to repayment in the future
    • Cash ISA
    • Overpayments from income
    • We will accept sale of an investment property, or second home in the UK, provided the equity in the property is currently sufficient enough to cover the amount being borrowed
    • Where a shortfall is identified, this element must be on either a capital and interest repayment basis, or the shortfall made up by means of increasing the deposit.
    • It is your clients’ responsibility to ensure they have sufficient capital to repay the mortgage at the end of the term.

    The Deposit

    • The applicants' own deposit or a gift from family is acceptable
    • We do not accept builders’ incentives/deposits
    • Purchase under value between parent/child can be considered

    Debt consolidation and capital raising

    • Considered up to a maximum of 80% LTV

    Equity Purchase

    • We will consider equity purchase up to a maximum of 90% LTV.

    Home Improvements

    • Considered up to a maximum of the product LTV limit

    Remortgages

    • Properties that have been owned for less than 6 months will be considered on an individual basis
    • In these circumstances, the 'free legal service' will not apply

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  • The Applicant(s)

    Minimum age

    • 18

    Maximum age

    • 70 (at end of the mortgage term)
      • Where the proposed mortgage term is likely to exceed our assumed applicant retirement age of 67, the ability to continue to pay the mortgage on a potentially reduced income should be documented.We will use state pension plus any personal/occupational pension income (working on the middle growth rate of 5%), to cover the remaining mortgage balance at that time.
    • We will carefully consider affordability into retirement for older applicants nearing retirement age.
    • We will require written confirmation from the adviser on the broker declaration form if the applicant does intend to continue to work to age 70. The type of employment will need to reflect their ability to work to age 70.

    Residency

    • The applicant/s must have resided in the UK for the past 2 years and have permanent right to reside

    Credit history

    • We are unlikely to be able to assist applicants with CCJs or arrears
      • Bankruptcy should have been discharged for at least 4 years

    Employment

    • At the time of the application, the minimum length of time in current job is 6 months. We may consider 3 months in the current job, providing same occupation, no employment gaps and no probationary period.
    • Applicants within a probationary period are not acceptable unless they are professionals on a standard 12-month probation, such as those in the police/fire service, etc
    • Employees on a fixed term contract with a minimum of 6 months until expiry are acceptable, providing they are professionals and have worked on fixed term contracts in the same profession for a minimum of 24 months. (i.e. Acceptable industries in this category include the NHS and IT. Unacceptable include unskilled, manual or clerical workers).
    • Temporary/agency workers are not acceptable
    • We will consider applicants on maternity leave and will assess the return to work salary. Please provide us with:
      • The last payslip prior to maternity leave starting, showing the full time salary
      • The applicant/s will need to confirm the following information in writing:
      • The intended return to work date
      • Whether they will be returning to work full or part time and the pro rata salary as applicable
      • Full details of maternity leave pay ie: how many weeks left at full pay, half pay and SMP.
      • What 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

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  • Borrowing Ability

    We will assess an applicants’ borrowing ability using an affordability calculation based on their income, commitments and expenditure. This will confirm the maximum amount we will be prepared to lend.

    Employed Income

    • The affordability Calculator will automatically apply deductions to gross income based on tax bands and National Insurance contributions to calculate the net income.

    Other income we may assess

    • Car allowance - 100%
    • Large town allowance – 100%
    • Guaranteed bonus/overtime/shift allowance – 100%
    • Regular overtime or bonus (monthly, quarterly, six monthly, annually – evidence of regularity must be provided) - 50%
    • Commission - 50%
    • Maintenance - 50% (with or without court order) subject to 6 months' paid evidence on bank statements
    • Child Tax Credit - 50% (excluding child care element)
    • Working Families Tax Credit - 50%
    • State and occupational pension - 100%
    • Investment income - not acceptable
    • 2nd Job income - 50% subject to 6 months’ track record
    • Cash in hand - where employees are paid 'cash in hand' we need to verify this by regular cash payments being paid into the bank account. If corresponding payments are not being paid in we cannot assess the income.

    Self-employed Income

    • We assess the applicants’ share of the most recent years’ net profit (or salary and dividends in the case of shareholding directors.)
    • We require sight of 2 full years’ accounts and a projection for the 3rd year. Latest trading figures should not be more than 12 months old. The accounts should show an increasing trend and profitability.
    • Income can be confirmed by way of an Accountants Certificate. The following accountants qualifications are acceptable: AAPA, CACA, CIMA, CIPFA or ICAEW or registered auditor.
    • We no longer accept SA302’s as proof of income for self employed applicants.

    Commitments & Expenditure

    • The affordability calculator will ask for all monthly commitments and household expenditure. The household expenditure should be based on the property to be mortgaged.
    • We will take into account any monthly credit commitments (including student loans) where there is an outstanding term of 6 months or more
    • We will use 3% of the outstanding balances on any/all credit card as the monthly commitment figure if not disclosed.

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  • Supporting documents

    With each application, please provide certified photocopies of supporting documentation, not originals:

    • Latest 3 months' bank statements showing all transactions
    • Latest 3 months' payslips (or 2 years accounts/accountants certificate)
    • ID for each applicant
      • UK or EU Passport
      • UK Photocard Driving Licence (full or provisional)
      • UK Paper Driving Licence (full only)
      • EU National Identity ID Card
      • Blue Badge
      • UK Residence Permit
    • Proof of Address – it is assumed that proof of address will be verified by the electoral roll search we undertake. If verification does not occur, you will be asked to submit one of the following documents:
      • UK Photocard Driving Licence (full or provisional)
      • UK Paper Driving Licence (full only)
      • HMRC Tax Code Notification
      • Recent Utility Bill
      • Council Tax Bill
      • Tax Credit or Pension Credit Letter
      • Local Authority Tenancy Agreement
      • State Pension Letter
      • State Benefit Letter

    We cannot use the same document to check the applicants ID and their address.

    (If you cannot provide any of the above documents, please contact the Intermediary Help Line on 0344 481 2010, Option 2 to discuss further options).

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  • Higher Lending Charge

    A higher lending charge is payable on loans above 80% LTV.

    Advance Premium
    80.00% or below No higher lending charge
    80.01% - 90.00% We pay the higher lending charge for the borrower
    90.01% - 95.00% Higher lending charge payable by the borrower at 9.19%


    There is no higher lending charge on Buy to Let mortgages.

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  • Residential applicants who own other properties

    • Applicants must be current owner occupiers for us to consider proceeding where there are any other mortgages in the background. We may consider an application where the customer is temporarily living with family or renting, due to work commitments and they still own their ex-residential property.
    • We must be totally satisfied that our security will be the customer's main permanent residence.
    • We may require proof of deposit for the new purchase.

    Let to Buy

    • New residential mortgages can be considered up to 90% max LTV where the customer is, for example, upsizing or relocating with their job.
    • We need to be satisfied that the existing mortgages will be converted to a permanent letting agreement and we require:
      • Consent to let confirmation, in writing, from the existing lender or a copy of the BTL re-mortgage offer from the new lender.
      • Rental coverage of 125% of the mortgage commitment (based on a notional 5% interest rate)
      • This calculation must include any additional capital raising for deposit funds.
      • If the rental coverage is less than 125%, any shortfall will be annualised and deducted from income before applying our income multiples to new residential mortgages.
      • No surplus rental income will be assessed.
      • A professional letting agents letter confirming the potential rental income
    • Where the existing property has little equity or is in negative equity, we may not be able to assist and the case should be referred to us before submission

    Existing residential property up for sale

    • Where the customer/s have their existing residential property up for sale, but may not have sold by the time they complete on the new purchase, we will assess as follows:
      • Up to 80% LTV, we will treat the existing mortgage payment as a commitment
      • Above 80% LTV, the applicants must be able to cover both mortgages (in aggregate) within our affordability calculation.
    • We require a copy of the estate agent's sales details.

    Existing matrimonial/dependent relative(s) mortgages to remain

    • Where the existing matrimonial/dependent relative(s) mortgage is to remain, we must be satisfied that the new residential property to be purchased is for the customers own use.
    • Up to 80% LTV, we will treat the existing mortgage payment as a commitment
    • Above 80% LTV, the applicants income must be able to cover both mortgages (in aggregate) within our affordability calculation.

    Existing BTL properties in background

    • New residential mortgages can be considered up to 90% max LTV
    • Applicants must be current owner occupiers
    • First time residential buyers with a BTL property in the background are not acceptable
    • First time landlords are acceptable
    • Professional landlords will be considered and treated as self-employed and we require 2 years accounts and/or tax assessments. They will be required to complete an Assets & Liabilities statement.
    • For Non Professional landlords, we will consider treating the BTL mortgage/s as self-financing, subject to:
      • Rental coverage of 125% of the mortgage commitment (based on a notional 5% interest rate)
      • This calculation must include any additional capital raising for deposit funds
      • If the rental coverage is less than 125%, any shortfall will be taken into account in the affordability calculation
      • Proof of rental income and mortgage payment/s on the most recent bank statement/s
      • Consent to let will be required or proof the mortgage is on a BTL basis (BTL mortgage statement).
    • Where the existing property has little equity or is in negative equity, we may not be able to assist and the case should be referred to us before submission.

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  • The Property

    Acceptable properties

    • Properties in England and Wales
    • The property must be the main permanent residence of the applicant(s)
    • Property must be of traditional construction (ie, brick and tile)
    • Timber framed construction may be considered if brick clad.
    • Wimpey ‘no fines’ and Easy Laing can be considered
    • New build houses are acceptable up to the product LTV limits (we do not accept builders deposits)
    • Flats/maisonettes (including new build) are acceptable for owner occupiers (not for BTL applications) but must be leasehold, and maximum LTV 80%
      • If in a block, must be a maximum of 10 storeys
      • We will not lend on flats that are above the 4th floor without lift access
      • If above a shop, flat must have its own entrance separate to the shop entrance
    • Solar Panels – houses fitted with solar panels are acceptable, provided that adequate insurance is in place to cover any damage caused to the property by the solar panels.
      • For re-mortgage applications on houses with solar panels fitted, please note that our ‘free legal service’ package is not available.

    Unacceptable properties

    • Prefabricated properties
    • Any construction covered by Housing Defect legislation, such as
      • High alumina cement; prefabricated reinforced concrete; large panel system; BISF
    • Ex-local authority & housing association (ex-public sector) flats will not be considered
    • Second homes/holiday homes are unacceptable

    Self-build

    • The advance will be released, normally, at eaves level, roofed in, plastered out and completed
      • Each stage will be subject to a re-inspection
      • The aggregate of releases (until final stage) will usually be restricted to 65% of value at the time
      • All our residential mortgage products are available to self-build mortgage applications

    Valuations

    • All the above are subject to valuation
      • All valuations are instructed via a panel management company and encompass a variety of national surveying firms

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  • Tenure

    • Both freehold and leasehold are acceptable
      • If leasehold, the unexpired term of the lease must be at least 60 years or equal to the mortgage term plus 30 years, whichever is the longest.

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  • Special schemes

    Shared ownership/shared equity/Government Homebuy

    • Shared ownership/shared equity/Government Homebuy are not acceptable

    Right to Buy

    • Applications are considered on the following basis:
      • Maximum loan 100% of discounted purchase price plus up to £250 costs
      • No additional borrowing for home improvements is available
      • The right to buy is usually restricted to the official tenants who must also be party to the mortgage
      • A copy of the right to buy letter should be obtained
      • Remortgage of a RTB property within the 5 year pre-emption period can be considered if there is no additional monies being raised
      • The second charge will be subject to a Deed of Postponement at extra cost to the applicant/s (unless there is only 12 months of the discount period remaining in which case no Deed of Postponement will apply)

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Nottingham Building Society is a member of the Building Societies Association the Council of Mortgage Lenders and the Financial Ombudsman Service and is a participant in the Financial Services Compensation Scheme. Nottingham Building Society is authorised by the Prudential Regulation Authority (opens in new window) and regulated by the Financial Conduct Authority (opens in new window) and the Prudential Regulation Authority. Registered under number 200785. Registered address, Nottingham House, 3 Fulforth Street, Nottingham NG1 3DL.

Nottingham Mortgage Services is the trading style of Nottingham Mortgage Services Limited registered in England and Wales (company number 03089887). Nottingham Mortgage Services is an appointed representative of Intrinsic Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority. (opens in new window)

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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