ADBO Switch

Additional Borrowing whilst Product Switching

 

Additional Borrowing for Product Switches

 

We are delighted to announce that on the 27th May we launched an enhancement to our Product Transfer process by enabling you to also apply for additional borrowing alongside your product switch. Since our launch into Product Transfers in December 2017 this has been the main area brokers have asked us to address.

Please note, if your customer is on mortgage payment holiday and wants debt consolidation we will not be able to progress their application

Below we have provide detail and clarity for questions you may have on this process.

Product and Criteria Eligibility

Product Switchers - Additional borrowing: In line with new business we will be limiting applications for additional borrowing as part of a product switch to 80% LTV, i.e. the combined product switch and additional borrowing must not be greater than 80% LTV.

 

1) Since I introduced my customer to you my client circumstances have changed and they would now not meet your new business criteria , as an example  less than 12 months on a zero hours contract . In these circumstances does that mean we cannot submit the Additional Borrowing application?
In order to apply for additional borrowing, the customer has to meet our lending criteria?

 

2) What types of applications can I request Additional Borrowing for?
Only available to residential mortgages.

 

3) What areas are out of scope for the Additional Borrowing process?
The following do not fall within this process: - Additional borrowing outside a product transfer window period, Buy to Let product transfers, clients in arrears, or clients with more than five sub accounts.

 

4) What happens if my client has been declared bankrupt?
You cannot consider your client for additional borrowing if the bankruptcy is within the last 6 years.

 

5) What happens if my client has involuntary agreements (IVA’s) against their name?
You cannot consider your client for additional borrowing if these have been within the last 6 years.

 

6) What do I do if my client wants to borrow less than £10,000?
The minimum the client can borrow under additional borrowing against their mortgage is £10,000, should they require a lesser amount they will need to explore via other forms of finance.

 

7) What do I do if my client wants to borrow more than £500,000?
Further advance on a mortgage is restricted to £500,000 lending above that amount is not allowed.

 

8) Is the additional borrowing offered on interest only?
No. The additional borrowing is on a capital and interest basis even if the client is an interest only client.

 

9) What do we do if the interest only client does not have a repayment strategy in place?
Where the client has in interest only element to their existing mortgage if they do not have an adequate repayment strategy in place they will not be considered for additional borrowing.

 

10) My client’s income was made up with a combination of UK Sterling and Euro – this was fine when I placed the mortgage with you. I presume that for the additional borrowing application you can again take the additional non-Sterling currency into account?

We can only accept UK sterling as income on additional borrowing cases.

 

11) During the Corona virus pandemic can customers still apply for debt consolidation while on payment holidays?
From 6th May, customers who are currently taking a payment holiday will not be able to consolidate their debts within a mortgage. This includes where the customer is taking a payment holiday on their mortgage or unsecured lending such as loans or credit cards with us or another lender. In line with our purpose, refinancing unsecured debts against a customer’s home would not be responsible when customers are unable to make their normal repayments.

 

12) How can the client pay the product fee?
The product fee can be paid in one of two ways:
                1 Up front – There will be a notification to the client from NatWest advising how to pay, which will be done over the telephone using a payment card.
                2 Add to additional borrowing – The amount is added to the loan and the customer will pay interest on the fee along with the loan.

 

13) Can my client have different rates for their additional borrowing to the rest of their mortgage?
Where a client is taking additional borrowing, the same rate will be applied to this and their product switch element of their mortgage.

 

 

Purpose of Additional Borrowing

1) How do I detail more than one reason for borrowing under home improvement?
Once you select Home Improvement as the reason for borrowing there will be a ‘Free Type Field’ to record more details make use of this field and detail the various reasons for home improvement

 

 

Process

1)Once I have submitted my Additional Borrowing application will me and my customer get a confirmation email with a reference number?
Once the Additional Borrowing application is submitted the screen will display a confirmation of submission. There will be no email automatically generate. The next correspondence received will be an update from the underwriter.  For submission of the packaging the customer’s existing mortgage account/reference should be used

 

2) Is there an affordability calculator for additional borrowing like the residential calculator?
Yes. A calculator is on the NWIS web site specifically for use with additional borrowing

 

3) When inputting dependants in on the application my client has 2 dependent children but is separated and pays court order maintenance, I presume on the application form I put in zero as we have accounted for the maintenance on the affordability questions?

Providing the maintenance for the children is accounted for, there is no need to enter the dependant children under dependants.  The dependants should only be accounted for once in the affordability either under dependants or under maintenance.

 

4) Can my customer act on behalf of their co applicant to take additional borrowing and switch products?
Your client can act on behalf of their co-applicant providing you are aware they are so authorised however, all applicants will be required to sign the Offer/Variation to Contract documentation.

 

5) How quickly once submitted does the additional borrowing take to draw down?
It is time dependent on the speed of submission of packaging and how quickly the client signs and returns the offer.  If a full valuation is required that can also add additional time to the process.

 

6) The affordability messages in New Business are they the same for Additional Borrowing?
Yes, In addition any request for additional borrowing greater than £50K this will result in a refer decision.

 

7) Can I do standalone Additional Borrowing at any time?
No, additional borrowing is only available when requested at the same time as a product switch.

 

8) Will the customer get both the switch and Additional Borrowing papers at the same time?
No, given the transactions are processed separately once additional borrowing funds have been released we’ll send the variation agreement for the new rate to be applied to the existing mortgage.

 

9) How will payments to the additional borrowing be collected?
The customer will still only make one monthly repayment by direct debit and we will write to advise them how much their new combined monthly payment is.

 

10) Can I save the application part way through and come back to complete at a later stage?
There is no facility to “save” this application unless it is fully submitted.  It may be possible in the future to have a “Save” functionality, but this will be for a later release.

 

11) Once my customer agrees the Additional Borrowing and returns the paperwork to you how long does it take for the funds to reach their bank account?

On receipt of the signed documentation the funds will be available for release to the client in 48hrs.  Or they can specify a date after the 48hrs.

 

12) Can I appeal a declined decision, if so what is the process?
There is no appeal process.

 

13) If the case declines or refers can I go back and amend details such as reduce the level of borrowing and could this change the Lending decision? If so, would this mean an additional credit search?
If the case is a decline a new resubmission of the case is required.
If the case is a refer this can be amended and resubmitted within the credit search.

 

14) What happens if there are any subsequent charges on this property from another Lender that are not being repaid?
We’re able to proceed if your client doesn’t have more than 1 subsequent charge (in addition to the main mortgage) which is not being repaid. If there is a subsequent charge, please note there will be fees to postpone the ranked charge if it’s not being repaid. NatWest will contact you to advise on the fees applicable. Also, we’re unable to issue the offer until the Deed of Postponement has been signed and returned by the subsequent charge holder.

 

15) Where will the funds be sent to when they are released?
Funds will be sent to the same Bank account that the client makes their mortgage repayments from. The only exception is where money is being used to repay a subsequent charge, in this instance the money will be sent directly to the charge holder.

 

Packaging

1) Is your packaging requirements for Additional Borrowing different or is it the same as for new business?
Yes the same as new business.

 

2) My client is looking to do a number of different home improvements – extension, new kitchen etc. What if any documentation would you expect me to send you regarding the improvements?
If the additional borrowing exceeds £50,000 we would expect to see estimates for work, if there is structural change then appropriate documentation proving the client has planning permission and building warrants in place.

 

3) Where do I send my packaging documents?
All supporting materials must be sent via e-mail and not through the Document upload portal – please email your supporting documents to intermediarydocs@natwest.com ensuring that the customers existing mortgage account number is in the email title.

 

4) On submission does the Additional Borrowing case give packaging requirements or a link to our website?

On submission the message is displayed but no specific packaging list will be displayed please refer to our normal packaging requirements for new business as these will apply

 

Procuration Fees

1) What Procuration Fee will I get paid for the Additional Borrowing and for the Product Switch?
The Additional Borrowing Fee will be paid at the same rate you receive currently for new business with a minimum payment of £250. The Product switch proc fee will be paid at the Product Switch rate i.e. 0.2%

 

2) How is my Procuration Fee paid?
As the Additional Borrowing and the Product Switch will be processed separately, the first proc fee will be for the Additional Borrowing and this will be paid once the funds are released. The second procuration fee will be for the product switch and this will be paid once the new rate is in effect on the existing mortgage.

 

Valuations

·         We will use House Price Index valuations for loans under 60% LTV and under £350,000. Outside of these we will instruct a variety of valuation tools, to get an up to date valuation.

 

 

·         If we need to instruct a valuation above 60% LTV or for loans above £350,000 this will be at the banks expense.

 

 

Where do I go for Help?

 

1) What do I do if the system isn’t working?

Contact the NWIS LiveTALK team at:  http://www.intermediary.natwest.com/intermediary-solutions.html



 

 

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