Lending Criteria | Loan Parameters | LTV Details

 

 



Applicant Details

Applicant Details

Furness Building Society assess income based on ability to pay, this will be capped at 4.25 X household income

Affordability Criteria

Please note the following:
 

  • our affordability calculator will assess affordability of the case purely based on the information you input
  • the Society does not use an automated affordability model
  • all applications are manually underwritten by our experienced underwriters
  • 3 months bank statements must be supplied with the application
  • the stated expenditure will be reviewed in conjunction with the bank statements and /or with statistical data as appropriate
  • where the stated expenditure  does not reflect that shown on the bank statements or appears otherwise unrealistic you will be asked to submit revised expenditure details
  • case will be declined where affordability cannot be proven based on realistic expenditure



You are strongly recommended to thoroughly verify the stated expenditure as delays may occur or the case may be declined where the information provided is deemed inaccurate.

Self employed income

All shareholding Company Directors and those sole trader/partner applicants with total income greater than £50,000 must produce 2 years full accounts produced by a suitably qualified accountant

Sole trader/partner applicants with total income less than £50,000 may produce 3 years SA302 tax assessments and corresponding tax overview documents to evidence income, providing the income evidenced is stable or rising.

Where profits have increased by more than 10% the Society may look to obtain further clarification from the accountant as to whether this level is sustainable and why.

The Society will not agree applications if there are concerns about the business even if the income is adequate and affordability is proven for the required mortgage.

Additional consideration will be required where:
• profit has reduced or increased significantly
• short term liabilities exceed liquid assets
• the business appears insolvent
• dividends have exceeded profit after tax

 

Stress Test

As of 30/12/2016 please note that the Society currently stress tests at 6.29% or 3% above the initial pay rate, whichever is the higher

 

This figure may change on a quarterly basis

Properties

Properties

Residential properties of standard construction in England and Wales, in Scotland the maximum LTV is 75%, either freehold (excludes flats/apartments) or leasehold with a minimum remaining lease term of 85 years at the beginning of the mortgage and 55 years remaining at the end of the term.

The Solicitor should confirm the details of the tenure in writing to the Society prior to completion (including the term remaining on the lease and amount of ground rent payable) and ensure that the Society is adequately protected by the freehold/leasehold arrangements.

The Solicitor is to ensure prior to completion that the Society is not adversely affected by the terms of the lease and also that a covenant is included in the lease whereby the landlord agrees to serve the Society with a copy of any Notice of Breach of Covenant.  In the absence of such a covenant, the Solicitor should ensure that a written notice is served on the freeholder advising him of the Society's interest and the need to notify the Society of any breach of covenant in the lease.

Where the property is a flat/apartment we will require that a suitable lease is in place.  We do not normally accept the following properties:

 

  • Freehold flats
  • Ex-local authority flats
  • City Centre flats
  • Tower Block flats
  • Flat roofed properties
  • Flats over 4 storeys
  • Land for rent
  • Properties of non-standard construction
  • Properties which fall under ‘House of Multiple Occupation’ legislation
  • Commercial properties
  • Student letting properties

If you are not sure whether we will consider the type of property in question, please contact Broker Liaison on 0800 22 05 68 or email furness.direct@furness-bs.co.uk
 

Loan Details

Loan Details

 

Residential loan parameters Minimum loan £20,000
Maximum loan £500,000 (higher by negotiation)
Maximum LTV 90% (95% can be considered providing advice has been given on a face-to-face basis)
Repayment methods Capital and interest
Interest only with documentary evidence from the introducer that the repayment vehicle or method of repayment is on track and will repay the mortgage at the end of the mortgage term.
Please see Interest Only Lending Criteria below.
Term Minimum 5 years and maximum 40
(Must be repaid by oldest applicants 80th birthday)
Higher Lending Charge Free to 95% LTV
Capital Raising For most purposes including debt consolidation
(referral essential for debt consolidation, Funds will be released via a solicitor who will be responsible for ensuring that the debts are repaid. This is not included as part of the free legal package and may incur additional charges)
Procuration Fees 0.35% - maximum of £1,750
Lending over 80% LTV * PLEASE NOTE ADDITIONAL CRITERIA BELOW.

 

Valuation Fees

Valuation Fees

 

Purchase price not exceeding Mortgage Valuation Report Homebuyers' Report
£100,000 £145.00 £335.00
£150,000 £170.00 £365.00
£200,000 £195.00 £415.00
£250,000 £230.00 £465.00
£300,000 £230.00 £515.00
£400,000 £280.00 £620.00
£500,000 £335.00 £740.00
£600,000 £425.00 £750.00

 

Identity Verification

Identity Verification

In order to comply with current regulations it is necessary for new customers to provide proof of identity.  We must obtain proof of your name and either your address or date of birth.  All documents provided must be originals or certified copies.  It is preferable not to send original documents in the post to us.  Documents can be certified by a Solicitor, Banker, Accountant, Authorised Financial Adviser, Teacher, Doctor, Minister or Post Office Master.  Documents printed off the internet are not acceptable.

LIST 1 (And either) LIST 2
A current valid passport A current council tax letter
Identity card issued by EO (N. Ireland only) Grant of Probate
A current valid photocard driving licence (full or provisional) A recent (last 3 months) bank or credit card statement
Current valid firearms certificate or shotgun licence A recent utility bill with another two documents one from LIST 1 and one from LIST 2
Alternatively you can provide  
A valid (old style) full UK driving licence  
Recent evidence of payment of state pension or other Government funded benefits/tax credits  

If the appropriate documentary proof is not available please refer to a member of staff for assistance.  We will keep a copy of the identification verification you provide.  These records are required to fulfil our statutory obligations and will not be used for any other purpose.

Lending Criteria where loan exceeds 80% LTV

Lending Criteria where loan exceeds 80% LTV

  • Repayment basis only.
  • Applicants on Voters Roll for 1 year (both applicants).
  • Evidence of address history to be provided for the last three years residence (unless on Voters Roll for 3 years).
  • 3 months bank statements – never exceeded overdraft limit/ no returned items.
  • Excess of income over expenditure of at least £200 evidenced on the Budget Planner based on the mortgage payment calculated at the initial pay rate.
  • Permanent employment 6 months with same employer (both applicants). Unencumbered deposit.
  • Clean credit searches - no missed payments, defaults or CCJs etc.
  • Self employed – 2 years accounts – not more than 12 months old, Sole trader/partner applicants with total income less than £50,000 may produce 3 years SA302 tax assessments and corresponding tax overview documents to evidence income, providing the income evidenced is stable or rising.

 

Debt Consolidation

Debt Consolidation

The maximum amount that will be considered for debt consolidation is £30,000.

When the debt being consolidated is over £20,000 or the LTV is greater than 50% we will require a solicitor to take responsilbility for repaying the debts.  The Society’s remortgage package is not available for this.  However we will contribute £150 towards the appointed solicitor costs.

This exclusion also includes capital raising when the purpose of the funds is to purchase another property.  We would expect the acting Solicitor to ensure the funds are sent directly to the vendor or creditor.  Again, the Society will contribute £150 to the legal costs. 

Any queries please call Broker Liaison on 0800 22 05 68 or email furness-direct@furness-bs.co.uk

Interest Only Lending Criteria

Interest Only Lending Criteria

Owner - occupied residential mortgages:- Standard Repayment Strategies
 

Where the repayment strategy is of a traditional nature eg regular premium endowment policy or equity PEP/ISA the maximum LTV is 70%.


• The repayment strategy must have been established for at least 3 years
• Satisfactory evidence of the repayment strategy must be provided in the form of a statement/projection of the maturity value at the end of the proposed mortgage term

The applicants should confirm that the proposed repayment strategy is on track by indicating on the application form


Owner - occupied residential mortgages:- “Non-standard” Repayment Strategies

Please note that the Society will consider some types of non-standard repayment strategy up to 60% LTV (i.e. those not mentioned above) but this will be on an individual referral basis. Please contact us on 0845 194 8669 or e-mail furness.intermediaries@furness-bs.co.uk if you wish to discuss a case.

Buy to Let/Consumer Buy to Let

All applications are fully assessed with a focus on affordability, based on the applicant’s full financial circumstances and also taking into account letting costs, taxation of rental profits and their own personal income and expenditure including any other mortgages held.

We do not apply an Interest Coverage Calculation (ICR) when assessing a new Buy to Let application, although the gross anticipated rent should be at least 125% of the interest charges at the initial pay rate.

Assessment of overall affordability is based on ALL mortgages (both current and proposed).
Buy to let mortgages are considered on properties in mainland UK.
The maximum LTV is 75% (must include fees).
Interest only and Capital and Interest will be considered.
The minimum mortgage amount is £50,000 (refer for lower amounts)
The minimum valuation for Buy to let mortgages is £75,000
Please note that we do not accept applications that include Debt Consolidation for Buy To Let remortgages
The following criteria should be met:
• the application form should be fully completed and all information and evidence should be obtained in the same way as a residential mortgage application.
• the applicant(s) must have total earned income of at least £20,000 pa (please refer to our checklist to see how to evidence this)
• the applicant(s) should usually own their own home (with our without a mortgage)
• any other mortgage payments e.g. residential mortgage should be included as outgoings on the Budget Planner.
• the security will be valued on a vacant possession basis
• the valuer will be asked to comment on the suitability of the property for rent, the rental income achievable, and the market for such rental properties in the area.
• the Society will only accept properties that are let, or are to be let on an Assured Shorthold Tenancy of between six and twelve months duration
• a statement of Assets and Liabilities is required
• three months satisfactory bank statements are required
• if there are other existing Buy to Let properties, we will require:
o copies of the current Tenancy Agreements
o latest annual mortgage statements
• applications will not be accepted on “New-build” flats. i.e. Any flat less than five years old or which has been previously unoccupied.
• there may be occasions where the applicant's overall indebtedness is considered too high based on their financial circumstances
For Regulated Buy To Let applications please see additional requirements below

Regulated Buy To Let (in addition to the Buy To Let criteria)

We will consider applications on a regulated Buy to Let product specifically for letting to family members.

We will not currently consider applications from adult children (sons and/or daughters) purchasing their parents current residence and then renting it back.
Regulated Buy to Let applications are considered strictly on an affordability basis. Any rental income received will not be factored into our affordability assessment. We obtain the AST to ensure that if the property converted to a traditional buy to let the gross rent would be at least equal to 125% of the monthly interest payment at the initial pay rate).

Regulated Buy to Let applications are assessed in the same way as a standard residential mortgage. The Society stresses the mortgage repayment in order to assess the affordability of the loan in relation to the clients existing outgoings and factoring in the new Buy to Let.

The stated expenditure will be reviewed in conjunction with the bank statements and/or with statistical data, as appropriate. Applications will be declined where affordability cannot be proven on realistic expenditure.

The Society will consider applications on an Interest only or repayment basis.

Holiday Let Criteria

 

  • up to 90 days per year allowed for personal use
  • maximum LTV 75%
  • interest only or repayment basis considered
  • the applicants must own their own home
  • rent must be at least 125% of interest payable at the initial product pay rate
  • total applicants’ earned income should be at least £30,000
  • applications underwritten on a “full status” basis
  • affordability fully assessed using net earned income plus 50% of actual /anticipated gross rent (either actual amount received or anticipated rent as advised by a specialised holiday let agent)  less all personal outgoings and the proposed new mortgage payment (stress tested at 6.54%)
  • maximum of 1 holiday let mortgage per borrower (the maximum to remain at one account overall including for joint borrowers)
  • where the applicant also holds buy to let properties, the maximum permitted exposure with the Society will be £500,000 and 5 properties and in total 10 properties and £1m (including any exposure with the Society)
  • 3 months satisfactory bank statements to be provided
  • a satisfactory statement of Assets & Liabilities to be provided
  • available mainland UK
  • Minimum valuation £125,000 (60% product £84,000 minimum valuation)
  • Minimum advance £50,000
  • No occupancy restrictions to apply to the security

 

Checklist Information

Checklist Information

  • Completed mortgage application form
  • Last payslip and P60
  • The previous lender’s last annual statement provided this shows 12 months individual payments. If it does not, then the last 12 months bank statements showing a payment made each month should also be submitted
  • Last 2 year’s accounts for self-employed applicants
  • Cheque for valuation/admin fee payable to Furness Building Society if applicable
  • 3 months bank statements – never exceeded overdraft limit/ no returned items.
  • Asset and Liability statement

 

Procuration Fee

This is a fee that it paid to mortgage intermediaries for the applications that they submit to the Society.


The current rate of  procuration  fee is 0.35% of the mortgage balance.







Other sub sections




Furness News

  • Pink Arrow NewsBuilding Society cash supports Alzheimers initiatives

The Alzheimer’s Society has received a donation of £156...

17th August 2016

Personal Finance News

  • Pink Arrow NewsFurness for Intermediaries confident in Buy to Let range

Furness for Intermediaries has launched two new five year fixed rat...

30th January 2017




Website designed and developed by: Ainsworth & Parkinson