Guidance on the required documentation for your customer's mortgage application

Acceptable?  No

Previously Widows Pension.

In this section we cover monthly, quarterly and annual bonus packaging:

Bonus – discretionary (Annual or Bi-annual) – Max 50%

Acceptable?  Yes

Main or Other: Main

Key on application as: Discretionary bonus

Evidence: Payslips showing bonus for last 2 years. 2 Payslips where annual or 4 Payslips where bi-annual

For discretionary bonuses we will consider an average of the last 2 years' payments (cash element only) and use 50% of it in our affordability calculation. When keying please key 100% of the amount received and we will use 50% of this. Please note that where the latest years' bonus was lower the underwriter will use 50% of the most recent year's bonus.

Bonus – guaranteed (Annual or Bi-annual) – 100%

Acceptable?  Yes

Main or Other: Main

Key on application as: Guaranteed bonus

Evidence: Payslips showing bonus for last 2 years. 2 Payslips where annual or 4 Payslips where bi-annual. Contract also required.

For guaranteed bonuses we will consider an average of the last 2 years' payments (cash element only) and use 100% of it in our affordability calculation. Please note that where the latest years' bonus was lower the underwriter will use 100% of the most recent year's bonus. We will require the contract to confirm there is no stipulations on the bonus being paid.

Bonus (Monthly)

Acceptable?  Yes

Main or Other: Main

Key on application as: Discretionary bonus

Evidence: Latest 3 months consecutive Payslips showing bonus payments. YTD income should support. If paid weekly the latest 13 Payslips

We can consider 100% of regular bonus evidenced by the last 3 months consecutive payslips. Monthly income should correlate to YTD salary. Where this is paid weekly the latest 13 payslips will be required.

Bonus (Quarterly)

Acceptable? Yes

Main or Other: Other

Key on application as: Discretionary bonus

Evidence: Latest 4 Payslips showing bonus payment for each quarter

We can consider 100% of quarterly bonus evidenced by the latest 4 Payslips showing the bonus payment for each quarter.

Must be paid for living expenses and not for fees. 

Acceptable?  Yes

Main or Other: Main

Key on application as: Other (taxable)

Evidence: Latest 3 months consecutive Payslips & Employment reference

Acceptable?  Yes

Main or Other: Other

Key on application as: Child Benefit

Evidence: Latest 3 months consecutive Bank Statements showing credits OR Benefit Award Letter

We can accept up to 100% of Child Benefit.

Please note that if an applicant is heavily reliant on these benefits (the ratio of benefits to main income) then please discuss these with our BDA team but be aware that the final decision is subject to underwriting.

The age of an applicant's children may be a factor. We require the awards letter as part of the application packaging. If the benefit will end for one or more of the children in the next 5 years, consideration should be given to if and how the customer can replace this income. If the income will not be replaced, then this element of the benefit should not be used.

If any party to the application receives an income of greater than £60,000 - Child Benefit must not be included.

Please note the customer(s) named on the award statement must match the application.

Click below for more information on:
• Working Tax Credits 
• Universal Credit

Acceptable?  Yes

Main or Other: Other

Key on application as: Child Tax Credit

Evidence: Benefit Award Letter

We can accept up to 100% of Child Tax Credit.

Please note that if an applicant is heavily reliant on these benefits (the ratio of benefits to main income) then please discuss these with our BDA team but be aware that the final decision is subject to underwriting.

The age of an applicant's children may be a factor. We require the awards letter as part of the application packaging. If the benefit will end for one or more of the children in the next 5 years, consideration should be given to if and how the customer can replace this income. If the income will not be replaced, then this element of the benefit should not be used.

Please note the customer(s) named on the award statement must match the application.

Click below for more information on:
• Working Tax Credits 
• Universal Credit

Acceptable?  Yes

Main or Other: Main

Key on application as: Commission

Evidence: Latest 3 months consecutive Payslips showing commission payments. YTD income should support.

Where this is paid weekly the latest 13 payslips will be required.

Acceptable?  Yes

Main or Other: Other

Key on application as: Other non-taxable income

Evidence: Latest 3 months consecutive Bank Statements showing credits OR Benefit Award Letter

Acceptable?  Yes

Main or Other: Other

Key on application as: Shift allowance   

Evidence: Latest 3 months consecutive Payslips & employers’ reference

Acceptable?  Yes

Main or Other: Main

Key on application as: Shift allowance    

Evidence: Latest 3 months payslips

Acceptable?  No

We will use 100% of converted income and will not apply a haircut. For any foreign currency values other than GBP, the amount should be converted using an appropriate currency conversion tool and input as GBP in the application and will be subject to the exchange rate on the day of underwriter assessment. Please see below for our acceptable list of currencies:

Where all or part of an applicant's income used to make the mortgage repayments is paid to them in a foreign currency, the MCD requires advisers to provide additional point of sale risk disclosures. It also requires lenders to monitor the customer’s foreign exchange exposure and notify them when it deviates adversely by 20% or more from the exchange rate at the point that the mortgage was completed.

Please also see Working abroad.

We can consider income that is received by Foster Carers.

HMRC generally treat foster carers as being self-employed. However, the SA302 is only used to determine any tax and NI payable after any qualifying amount has been deducted.

Acceptable? Yes

Main or Other: Other

Key on application as: Other non-taxable income

Evidence: Local Authority confirmation of the last two years’ payments received, along with confirmation that the customer is still a registered Foster Carer from the Local Authority.

Acceptable?  No

• A variation of allowances can be received by customers to compensate for the location of their work e.g. Town Allowance, High Cost Area Allowance, Area Allowance etc.
• Consideration should be given to whether the customer is relocating as part of the application, and whether the income will continue.

Acceptable?  Yes

Main or Other: Main

Key on application as: Shift allowance      

Evidence: Latest 3 months consecutive Payslips

Acceptable?  Yes

Main or Other: Other

Key on application as: Child maintenance   

Evidence: Latest 3 months consecutive Bank Statements. May need Court order (where applicable). See case packaging requirements on Full Mortgage Application as these could differ.

Child maintenance:

Child maintenance can be accepted at 100%. This can either be court ordered or non-court ordered.

Court Approved Maintenance (spousal):

Can be accepted at 100%. This will be subject to underwriting and we may require sight of the court order.

• There is an expectation the payments will continue at the current level for at least the next 5 years and we may also need to understand how the customer will replace this income when it ends.
• We require up to 3 months bank statements to evidence this, please see your tailored packaging requirements upon submission of the Full Mortgage Application.
• The party paying the maintenance can’t be named on the bank account the maintenance is paid into.
• We can consider maintenance income paid by someone living abroad subject to the underwriters discretion, upon a Full Mortgage Application being submitted. This must be paid in an acceptable currency. 

• This is received by medical staff for flexible shift work.
• Where a customer receives ‘bank’ income in addition to their main NHS employment this should be treated as overtime (this may be evidenced on separate / additional payslips to the customer’s main income).
• Where a customer is only in receipt of ‘bank’ income, this should be treated as Zero-Hour contractor income.

NHS Bank Work with Main NHS Employment

Acceptable? Yes

Main or Other: Main

Key on application as: Regular Overtime

Evidence: Treated as Overtime. Latest 3 months consecutive Payslips. YTD income should support.

NHS Bank Work only

Acceptable? Yes

Main or Other: Main

Key on application as: Employed

Evidence: Latest 3 months consecutive payslips and latest P60

Acceptable? Yes

Main or Other: Other

Key on application as: Other taxable income

Evidence: Department of Work & Pensions Statement OR Benefit Award Letter

Acceptable?  Yes

Main or Other: Main

Key on application as: Personal Independence Payment   

Evidence: Benefit Award Letter

Acceptable?  Yes

Main or Other: Other

Key on application as: Other non-taxable income

Evidence: Latest 3 months consecutive Bank Statements OR Benefit Award letter

Acceptable?  Yes (only on residential cases)

Main or Other: Other

Key on application as: Rental income

Evidence: 

• 2 years SA302’s / Tax assessments.
• 2 years Tax Year Overviews.
• 3 months bank statements (showing rental credits and mortgage payments).

Acceptable? Yes

Main or Other: Other

Key on application as: Shift allowance

Evidence: Latest 3 months consecutive Payslips. YTD income should support

We can consider stipend income where the long term nature of the income can be evidenced.

Stipends are commonly paid to clients who are studying their PhD, are in a religious role or working for a university or a scholarship. This is not an exhaustive list and others can be considered.

Please contact our BDA’s to discuss this further. 

Acceptable?  Yes

Main or Other: Main

Key on application as: Other non-taxable income 

Evidence: Latest 3 months consecutive Payslips

Acceptable? Yes

Main or Other: Main

Key on application as: Employed contractor

Evidence: Latest 12 months consecutive Payslips & employers reference

Acceptable? Yes

Main or Other: Main

Key on application as: Trust

Evidence: Latest 6 months consecutive evidence (e.g. bank statements OR payslips) & letter of confirmation

Acceptable?  Yes

Main or Other: Other

Key on application as: Working Families Tax Credit

Evidence: Benefit award letter

We can accept up to 100% of working tax credits.

Please note that if an applicant is heavily reliant on these benefits (the ratio of benefits to main income) then please discuss these with our BDA team but be aware that the final decision is subject to underwriting.

Please note the customer(s) named on the award statement must match the application.

Click below for more information on:
• Child Benefit & Child Tax Credits 
• Universal Credit

There must be a history of employment over the past 12 months and confirmation that a current contract is in place.

Acceptable? Yes

Main or Other: Main

Key on application as: Employed

Evidence: Latest 3 months consecutive payslips and latest P60