Loan Underwriting Guidelines

Understanding our mortgage and commercial loan underwriting guidelines will help you understand your loan options when applying. The primary items reviewed in determining whether to approve or decline a loan application have been outlined below...

 

Income

We need to be assured that you have an income that can service the mortgage payments over the long term. Primarily, our main focus is on either ‘employed’ income (PAYE/commission/bonus) or ‘self-employed’ income (accounts/tax returns). However, we can take other forms of income into account which could include rental income, pension income, a car allowance, maintenance payments, tax credits or child benefit.

This is one of the most important variables we examine because it is used to repay the loan. Income is reviewed for the type of work, length of employment, educational training required, and opportunity for advancement. We will look at the source of income and the likelihood of its continuance to arrive at a gross monthly figure.

i. Salary and Hourly Wages

Calculated on a gross monthly basis, prior to income tax deductions.

 

ii. Part-time and Second Job Income

Not usually considered unless it is in place for 12 to 24 straight months. We view part-time income as a strong compensating factor.

 

iii. Commission, Bonus and Overtime Income

Can only be used if received for two previous years. Further, an employer must verify that it is likely to continue. A 24-month average figure is used.

 

 

Credit File

We will generally conduct a search on your credit file to make sure that the payments on current and previous mortgages, loans, debts, etc, have been made. However, we may consider a very small number of mortgage arrears or late payments on other loans or credit cards.

 

 

Deposit

Generally, the greater the amount of deposit you can put down, the better the loan product will become approved and made available. The minimum that is generally accepted is 5% although there are some schemes that may accept less. More skin of the borrower in the property or project being financed, the better the chances of approval.

 

Property

The property is the security against the loan and so we will typically undertake an internal inspection and valuation of the property to make sure that it is adequate for our security. No lending will be provided for secured loans if your security property does not provide enough equity to lend against.

 

Buy-to-Let

We will need to be satisfied that the expected rent to be received is greater than the mortgage payment. As an example, if the mortgage payment is £1,000 per month, we will typically require that the expected rent to be 125% of this, i.e. £1,250 per month.

In addition, we will require evidence of your personal income from employment or self employment and will require this to satisfy a minimum amount, for example £20,000 per annum. However, we may waive the minimum personal income requirement altogether.

Useful Information

The FCA does not regulate some forms of buy to lets, commercial mortgages, secured loans, unsecured loans, bridging loans, trusts, agricultural loans, overseas mortgages, and conveyancing or debt management. Our lending to limited companies, incorporated partnerships and unincorporated partnerships of three or more is not regulated by the FCA.
 
Not being regulated by the FCA means that we can make our own lending decisions (incl creative credit options). All loan agreements are still subject to UK Laws and UK Courts.
 
Kindly read all our Terms and Conditions (T&Cs) carefully before you sign any Loan Agreement. If you do not understand our loan contract terms & conditions, invest in the services of a solicitor before you sign.
 
Your use of this website and/or services constitutes acceptance of our T&Cs.
 
If you disagree with our T&Cs and How We Operate, please don't use our lending services.
 

Before You Apply

You should not apply for a loan amount that you cannot comfortably afford to repay now and in the future to avoid the possibility of legal action.
 
It is an offence to knowingly give false, inaccurate or misleading information when applying for a loan. If you give such information, you may face criminal prosecution and/or civil action for the recovery of any losses incurred by us.
 
Any property used as security, which may include your home or pensions and/or business assets, may be repossessed if you do not keep up repayments on a loan or any other debts secured on it. | Our Repayment Assistance Programme is, however, available to qualified borrowers only.
 
Note: As part of our KYC and anti-fraud checks, you cannot email us from any of the free mail providers accounts as a business, including but not limited to gmail, hotmail, or yahoo. You are advised to send us an email from the email of your business or company website. If you are borrowing as a business and you don't have a website, we can't deal with you. Learn more.