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Lending criteria – residential

Service Level Agreements

• AIP Turnaround time: 3 working days from receipt of completed application form which has passed an initial Quality Assurance Check
• Full Mortgage Application to Formal Mortgage Offer turnaround time: 14 days from date of FMA (Full Mortgage Application)
Rates are Only Secured when your application reaches Full Mortgage Application (FMA) Stage – we will confirm in writing when a rate has been secured and all lending is subject to a satisfactory valuation of the proposed property.

Use our A to Z tool below for details of our residential lending criteria – click on the “A – C” or “D – K” etc to view the criteria headings.

Use our A to Z tool below for details of our residential lending criteria

A-C D-K L-N O-Q R-Z

Not acceptable – the Bank only uses finalised income figures for all self-employed customers.

Required where declining income declared on SA302’s provided.

For limited companies please note that we will require an accountants reference from a qualified accountant. (ACCA, CIMA, AAT) which must be completed on the Bank’s own template.

If the accountant cannot provide this then we may be able to use the last 2 years full company accounts.

Would use 60% of the face value figure provided by the broker for the affordability assessment.

The Bank does not at present have an Affordability calculator for Intermediaries.

Current Ultimate Loan to Income Multiples are
UP TO 60% LTV – 5X Sole & Joint
60% – 75% – 4.75X sole 4.50X Joint
75%-95% – 4.50X Sole 4.00 X Joint

Above is a guide to establish maximum borrowing amount as decision to proceed is based mainly on monthly affordability assessment using ONS data.

Bank considers Right to Buy (100% of discounted Purchase price if LTV on Open Market Value (OMV) does not exceed 75% and Shared Ownership (up to 95% of the share).

MINIMUM AGE: 18 years old.

MAXIMUM AGE:

  • All mortgages must finish before the client reaches age 70 if employed or self-employed without Lending into Retirement (LIR).
  • If looking to go beyond age 70 – refer to Lending into retirement policy
  • All mortgages MUST finish before the age of 75 without exception
  • Please note that lending into retirement means clients are looking to use pension income ONLY. For cases where the mortgage is looking to finish BEFORE LIR policy takes effect then the following ages apply:
  • Max age at time of application is 67 next birthday if applying for a 2yr fixed rate.
  • Max age at time of application if applying for a 5yr fixed rate is 64 next birthday.

If mortgage is in JOINT NAMES then maximum term is determined by age next birthday of eldest applicant to the above limits.

We accept mortgages where customers at the end of the mortgage term will be 75 – note that for any customers older than age 70 all lending is assessed against our lending into retirement policy.

Contractors

Applications from Contractors will be considered provided that:

  1. the applicant has a current continuous contracting employment of 12 months or more, with 6 months of the contract to remaining; or
  2. the applicant has 2 years continuous service in the same type of contracting employment.

Evidence of their employment track record may be required.

Applicants should be treated as self employed if they pay their own tax or subcontract to more than one company.

IT & Construction Industry Scheme Contractors.

IT & CIS Contractors must be treated as self employed.

We do not lend against properties where there is a current agricultural tie.

The Bank will not lend on properties let out on Air BnB.

The Bank would consider properties with an annexe but would require it to be occupied by a family member. Down to Valuers comments regarding saleability for valuation report. The annexe would need to be empty and not let out.

Where Applicant 2 receives no income the application will be treated as if from a sole applicant for affordability purposes.

Where an Architect’s cerificate is offered in place of a new build Warranty the Bank will seek for a valuer’s opinion on validity to be provided before looking to proceed.

Automatic decline if any mortgage arrears over £100 in the last 6 months. Any arrears of 1 month or more in the last 6 years must be disclosed.

Automatic decline on 2 or more missed payments on other debts in the last 6 months. Any arrears of 2 months or more in the last 6 years must be disclosed.

If looking to purchase via an Assignable Contract refer to the Lender.

The Bank does not currently consider BTL mortgages.

This is an acceptable form of income but the Bank only accepts 60% of the total attendance allowance for affordability purposes..

The Bank do not allow back to back transactions. The vendor is required to own the property for 6 months minimum. The only exception is if this is an inheritance, then please refer to lender for review..

Will need to have been cleared for 6 years as anything less than this we will look to decline.

If historic will not be disclosed as we only review last 6 years credit conduct history.

The Bank requires sight of the most recent 3 months on all current accounts held by the customer.

Refer to the Bank to see if the property is considered suitable security.

Refer to the Bank to see if the property is considered suitable security.

Bedsits are not considered suitable security.

The Bank can look at cases where the customer is on benefits only, please note however that the Bank only uses 60% of the benefits that they receive as income for affordability purposes. Housing benefit is not accepted.

For all other benefit income apart from Universal Credit(excluding Housing element), PIP, DLA, Working Family Tax Credit, Child Tax Credit, Child Benefit, Income Support & Carer’s Allowance please refer to the Bank to discuss an individual case.

Please refer to the Bank to check if the property in question can be considered suitable security. This will be subject to LTV and also valuers comments regarding saleability and the mortgage security from the valuer. Broker to provide full address prior to submission for the Bank to check. Anything PRE 1987 is not considered and will be declined.

Can accept guranteed or non-guaranteed. Bonus income is treated as an average of the last 2 years bonus paid to the customer. The Bank uses 60% of this average for affordability if required. If the customer has been furloughed and has returned to full time work, the Bank will use paid bonus history as above with the special condition that anyone who has been furloughed has returned to their place of work on full pay prior to exchange.

There is no ability to borrow back on a product.

The Bank does not provide Bridging loans.

Will not be considered as all applicants must be residing in UK at time of application.

The Bank does not allow the Broker fee to be added to the loan.

Whilst Builder’s gifted deposit or other cash gift are not acceptable refer to Bank as regards other incentives offered.

Refer to the Bank where release of funds is required before the Building Warrant is received.

Bursary income is acceptable & the Bank would use 60% of the total Bursary income figure provided by the broker for the affordability assessment.

The Bank does not currently consider BTL mortgages.

If in receipt of a Flight Allowance the Bank can use 60% of the last 3 month Flight Allowance average.

Capital & Interest repayments are allowed.

Capital raising is allowed up to 75% on Full Ownership and 95% for Shared Ownership for the following

  • Home Improvements
  • Land Purchase
  • Debt consolidation if referred via an Independent Financial Adviser
  • For purchase of a BTL the Bank would ask the broker for details of this and any other BTL’s as part of the affordability assessment, for example the amount of borrowing and expected rental income to see if it fits their self funding model to discount it.

Capital raising for the business purposes including consolidation of business debt is not allowed.

The Bank uses 100% of any Car Allowance amount paid for affordability.

Certified ID documents are only required where the Bank is unable to verify ID or confirm the address electronically. The Bank can provide details of acceptable verifiers.

Where change of usage is proposed please refer to the Bank.

This will need to be listed on the application form under Expenditure to be factored into the monthly affordability assessment,

This will need to be listed on the application form under Expenditure to be factored into the monthly affordability assessment.

Lending where there is a commercial property involved can only be considered where commercial and personal properties are on different titles. Commercial premises are based on the valuers comments as most new build apartment blocks have a commercial aspect to them, usually on the ground floor. Will be based on valuers comments regarding saleability and mortgage security.

The Bank will be happy to use commision as an additional form of income. The Bank would look to use 60% of the last 3 months average commission income for affordability assessment.
If the customer is on commission only income then the Bank may not wish to proceed with this case and will be referred to their underwriters for review.

The Bank does not lend on Commonhold properties.

If there is a history of missed payments or defaults on mobile phone contracts please refer to the Bank.

Transactions at under value will not be considered.

Consent to Let can be considered 6 months from date of completion. All cases must be referred and will be treated on a case by case basis. A fee is applicable and available on request.

The Bank does not offer Consumer Buy to Let mortgages.

Contractors

Employment contracts
Subcontractors, fixed / short term contracts.

Applications will be considered from the above employment types, provided that:

  1. the applicant has a current continuous contracting employment of 12 months or more, with 6 months of the contract remaining; or
  2. the applicant has 2 years continuous service in the same type of contracting employment
    Evidence of their employment track record may be required.

Applicants will be treated as self employed if they pay their own tax or subcontract to more than one company.

IT & Construction Industry Scheme Contractors.

IT & CIS Contractors will be treated as self employed.

Will be down to valuer’s commentsas to whether considered suitable security.

Will need to refer to the Bank with background information.

Cases will be declined in the following circumstances:

  • Outstanding CCJ Greater than £100 in the last 6 years.

All CCJs in the last 6 years must be disclosed. In such cases our underwriters will review the files and make a final decision.

Credit card balances will be used for the affordability assessment unless fully repaid prior to exchange or as part of debt consolidation. A Special Condition will be included in any ESIS or Formal Mortgage Offer to this affect.

If debts are to be cleared from proceeds of the remortgage application OR are being cleared through savings or other means then the Bank will require that a special condition of the formal mortgage offer be added requesting proof of repayment of debt. The Special condition will state the name of the lender as well as the last 4 digits of the borrowing account number / card number to clearly define the commitment being repaid.

The Bank uses Experian to check a customers credit history.

All applicants are credit searched.

The Bank does not lend on Custom Build properties.

We are proud to be the bank of The Salvation Army International. Find out more about our shared history.

Reliance Bank Limited,
Faith House,
23 - 24 Lovat Lane,
London,
EC3R 8EB

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