Coronavirus Hub

Coronavirus Hub

Income Requirements and Packaging

Important information: For all new cases please check affordability through our calculators before running an agreement in principle or full mortgage applications.

 

Self Employed Customers

 

What you need to do

 

Criteria - examples of customers  

  • Customers who have not and do not expect to experience a change in their self employed income.
  • Customers who have and/or expect to have a reduction in their self employed income, including those eligible for the Self Employed Income Support Scheme (SEISS).  
  • Customers that cannot provide evidence of their revised income or fail the affordability assessment, please explain we will not be able to assist them at this time and please  do not submit an application.  There are no exceptions to this policy. 

 

Affordability

When completing the affordability calculator for a new application you must calculate income using the lower of:

  • The average of the last two years net profit
  • The most recent years profit
  • The confirmed government income support amount

 

For Directors of a Limited Company (more than 20% share) you must use the lower of:

  • The average of the last two years salary and dividends
  • The most recent years salary and dividends

Packaging

For all self-employed customers , the following evidence must be provided on submission of application.  If applications are received without full packaging this will delay processing and if do not receive with in 15 days we will lapse the case.

 

Important points to note:

 

·         To assist the underwriter in making a decision please explain the customers personal and business circumstances and how they will be able to meet their on going mortgage obligations in the current climate including all additional liabilities taken on during the lockdown period.

 

·         Where additional funds are being requested, ensure you capture the reason for further borrowing as we may ask for evidence of purpose of funds.  Debt consolidation will not be accepted for additional funds as this time.

 

·         You should be clear with your customer that their application may be declined at underwriting stage where we are not satisfied with the income calculated and/or that on-going affordability cannot be evidenced. This decision will be final and cannot be appealed.

 

·         Where your customer’s income has been negatively impacted by COVID-19, they are not eligible for the government Self Employment Income Support Scheme and their revised income fails affordability assessment, please explain we will not be able to assist them at this time and do not submit an application.

 

 

These changes also apply to applications that have already been submitted but have not yet completed:

  • Where you inform us of a material change to the application
  • Where the customer has contacted us to make us aware of a change to their self employed income

We do not expect you to proactively review your pipeline.

 

As a responsible lender, we have been able to make these changes whilst ensuring that we maintain our risk appetite and the quality of business we accept.

 

Mandatory self employed customers supplementary sheet

 

Packaging guide

 

IMPORTANT INFORMATION FOR CUSTOMERS IN PAYMENT HOLIDAYS - CLICK HERE

 

Employed Customers

 

Q.       The customer’s employed income has changed permanently or temporarily AND/OR they are now on the Government scheme (Coronavirus Job Retention Scheme), how do we assess?

a.       We will use the customer’s new revised income for affordability assessment and you will need to provide evidence of the customer’s new income.

 

Guidance for furloughed customers

 

Mandatory self employed customers supplementary sheet

 

Packaging guide

 

IMPORTANT INFORMATION FOR CUSTOMERS IN PAYMENT HOLIDAYS - CLICK HERE

 

 

 

 

Valuations

Following updated guidelines we are pleased to confirm we have recommenced physical valuations.

 

This applies to:

·         Residential and Buy to Let applications

·         Properties in where the occupier allows access

·         Properties where the valuer confirms the property is safe to enter

 

This does not apply to:

·         Properties where the occupier does not allow access

·         Properties where the valuer confirms it is not safe to enter.

 

If the application relates to a property in Scotland, please note that our process for Transcript valuations remains unaffected and the Home Report must have been completed within the last 90 days if you are intending to rely on a Transcript.

 

Where we are not able to complete a property valuation in person, the customer’s application will be placed on hold.

We will continue to work closely with all of our valuers and will be working at pace to progress all applications, prioritising those which are currently on hold subject to a physical valuation

 

Offers

Where a customer is one month from expiry of their current mortgage offer, you can submit a request for an extension of up to 3 months on their behalf.

 

The request will then be assessed and will take into account any change in the Customers circumstances that you have made us aware of.

 

Prior to submitting the offer extension request, please check our affordability calculator to ensure the case is still affordable.

 

Where the case no longer passes the affordability test, you may of course decide to vary the requirements of the application (for example a lower loan amount and/ or extend the mortgage term.)

 

If you are looking to amend the Customers requirements as a result of a change in their circumstances, please provide an accompanying memo when forwarding supporting documents for the case to be assessed.

 

Offer extension form

 

 

 

Existing Customers

Please visit our direct website for more information on payment holidays

 

Porting

If you have any customers looking to port their existing mortgage to a new property, please speak to your BDM in the first instance.

Your BDM will explain the porting process to you as well as providing an update on our current service levels.

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