Lending criteria FAQs
Income, benefits and employment
Your client will need to provide details for a minimum trading period of two years, which has been verified by an Accountant’s Certificate. The latest year end can’t be more than 18 months ago.
We will request the Accountant’s Certificate, which must be prepared and signed by someone who has the professional indemnity cover to provide accountancy services. If this isn’t done, we won’t accept it and instead we’ll use the corresponding years’ Tax Assessment forms issued by HMRC (SA302).
Once we’ve received the verified figures for your client’s last two years’ income, we’ll use either
- the lower of the most recent year’s share of/net profit OR
- the average of the last two year’s share of/net profit figures
More information can be found on our employment criteria page.
If your client has lost/not kept the original documents sent automatically by HMRC, they'll need to go to the HMRC website and request the following:
- the latest two years tax calculations and
- the corresponding two years tax year overviews.
If your client’s on a permanent contract with a basic salary only, we’ll just need to see their most recent payslip.
If we’re using their basic salary plus bonus/overtime/commission, the proofs required will vary depending on how often they receive payment. For full details please read our income criteria.
We’ll accept income if your client’s been employed on a fixed term contract for at least 12 months. Otherwise they’ll need to have at least 24 months remaining on their current contract.
If your client is employed and already on parental leave, we’ll need to see either:
- the latest payslip which shows the client is on parental leave, eg Statutory Maternity Pay information and the payslip prior to going on parental leave or
- a copy of the letter received from their employer confirming the terms of their parental leave or
- a copy of their return to work letter.
The letter must be addressed to your client (not to Nationwide or to whom it may concern) and should state the return to work income. Where the letter does not confirm the return to work income, the payslip issued before parental leave started will be required.
If your client is employed but their parental leave hasn’t started yet and their income won’t be changing, we just need to see their latest payslip.
If your client’s self-employed, they’ll need to provide the proofs required for all self-employed applicants.
If your client’s on or due to go on parental leave, all existing and future childcare costs should be included as an outgoing and the future number of dependants should be declared.
Income paid in a foreign currency isn’t acceptable for the following new lending applications:
- Purchases (including second property types)
- Further advances
- Porting with additional borrowing
Where a client is looking to complete a combination of transactions, such as a term change and additional borrowing, then foreign currency income can’t be used.
Applications using foreign currency income without new lending
- For existing Nationwide customers moving home, where no new lending is required, foreign currency income can be considered. This includes clients porting without additional borrowing.
- For existing Nationwide customers looking to change their term or repayment type, foreign currency income can be considered.
- If there’s no affordability assessment required, such as switching rates at deal end, we won’t need to look at income and therefore foreign currency income won’t need to be considered.
- Child Benefit
- Working and Child Tax Credits
- Pension Credits
- Incapacity Benefit
- Employment and Support Allowance – support group only
- Disability Living Allowance (DLA) for a person aged 16 or over
- Carers/Attendance Allowance
- Personal Independence Payment (PIP)
- Industrial Injuries Disablement Benefit
- War Disablement Pension (key as a pension)
- Armed Forces Compensation Scheme
- Widowed Parents Allowance (only where at least one child is aged 11 or under)
Applications where income is made up primarily of benefits and maintenance are likely to be declined.
You can find full details on the benefits we accept on our income criteria page.
The maximum LTV for a new build is
- 85% for a house
- 75% for a flat
For a new build Shared Ownership purchase, the maximum LTV available based upon the applicants share is
- 85% for a house
- 75% for a flat
For a non new build Shared Ownership purchase, the maximum LTV available based upon the applicants share is
- 90% for new Nationwide borrowers
- 95% for existing Nationwide borrowers
We calculate the LTV based on the open market value of the property. The maximum LTV varies depending on the property type, scheme type etc and the value of the Equity Share Loan.
You can find out more details by visiting our Equity Share Loan page.
The maximum LTV for a Restricted Resale Price property is
- 90% for new and existing borrowers
Unless the property is a new build, then our new build LTV limits will apply
- 85% for a house
- 75% for a flat
The maximum LTV for a Genuine Bargain Price property is
- 95% for existing borrowers
- 90% for new borrowers
Remortgages and additional properties
Yes - to find out more about the Let to Buy process for clients who already have a Nationwide mortgage, please visit our Existing Nationwide Borrowers section.
We offer a joint Let to Buy proposition between Nationwide and The Mortgage Works. Read our Let to Buy section to learn more.
If your client will own more than one property on completion of a new loan, the maximum LTV on their application will be 85%.
Applications for these clients should be keyed as a Second Property, even if the property being purchased will be your client’s main residence.
When considering affordability, we’ll take into account the outstanding balance of any mortgages that are continuing, unless they are let and satisfy our Additional Properties criteria.
Once you have filled in your client’s details on the Affordability Calculator and the results have been generated, click the ‘print’ button at the bottom of the page to print their results. To personalise the results by adding your client’s name, simply type in the box below ‘Add Customer Name’.
To save your client's results, follow the steps below:
1. Fill in the calculator as normal.
2. On the results page press ‘Print’.
3. You should then see a Print Options screen that asks you to ‘select printer’. Scroll until you find any of the following options:
- Adobe PDF
- Microsoft XPS Document Writer
- PDF Creator (you can download a free version of PDF Creator here).
4. Select one of the options above, then press ‘print’.
5. After a few moments, a window should pop up asking you to ‘Save File As’. Choose your destination folder as normal and press ‘save’. Your client’s results should now be saved.
If any of your client’s debts will be paid off on or before completion, you’ll still need to declare them in the ‘Monthly Outgoings’ section of the Decision in Principle (DIP). You'll then need to key the amount your client will be paying off so that we can exclude it from our affordability assessment.
Lending into retirement
The retirement age of an applicant is based on your client's stated retirement age. The maximum retirement age is 70. The mortgage term mustn’t extend beyond the 75th birthday of the eldest applicant, unless you meet our criteria for borrowing in retirement.
Please see our borrowing in retirement page for details of borrowing up to the age of 85.
If the mortgage term extends into retirement, depending on the current age of the applicant, the following criteria will apply:
Retirement is less than 10 years away
- The details of both the current income and anticipated retirement income must be provided
- The lower of the current income or anticipated retirement income will be used for affordability purposes
Retirement is 10 years or more away
- The current income will be used for affordability purposes
- Evidence of the existence of a current and/or past pension (other than State Pension) e.g. payslip showing a pension deduction, or a pension payment on a bank statement, or a pension statement.
Borrowing in retirement is a scheme available to remortgage clients and existing Nationwide borrowers who are already retired. Please see our borrowing in retirement page for full details.
Lending into retirement criteria applies to all other mortgages, where the term of the mortgage extends beyond an applicants anticipated retirement age (up to a maximum of 70), further information can be found on our income criteria page.
If you’ve chosen a tracker or variable rate mortgage for your client, the rate may change as a result. After the mortgage has completed we'll write to your client to confirm the new rate and payments before the first payment is collected.
All mortgage tracker KFI and offers documents will reflect the new Bank of England Base Rate from 10 August 2016. The first payment amount will be confirmed in the first payment letter, which is issued up to 10 days after completion.
First Time Buyers are applicants who have not held a mortgage in the last three years (this includes UK and Non UK mortgages).
To qualify for First Time Buyer discounts, all applicants to the mortgage need to be First Time Buyers.
Definitions for all types of buyers can be found on our Customer Definitions page.
We consider new build incentives to be anything over and above the deposit. Examples of incentives include (but aren’t limited to):
- Paying legal fees
- Stamp duty land tax
- Soft furnishings
- Mortgage subsides
- White goods (including furniture and carpets)
We allow incentives, but if the incentive is part of an equity share loan, the applicant must provide a minimum 5% deposit which has come from their own resources. The cost of the other incentives won’t be deducted from the purchase price of the property.
To read about acceptable incentives for Help to Buy purchases, read our Help to Buy: Equity Loan lending criteria.
If your client’s a UK national working abroad and their family (ie spouse and children) will remain in the UK as occupiers, these normally form acceptable cases. It’s expected that the spouse will be a joint borrower.
If the property will be let or left unoccupied whilst your client works abroad then the application isn’t acceptable.
Income paid in a foreign currency isn’t acceptable and self employed income from outside the UK won’t be considered. Applicants working abroad may have additional outgoings abroad, which will need to be taken into consideration.
All applicants must be resident in the UK for tax purposes when the mortgage has completed.
Applications can only be considered if your clients can provide a full UK address history for the last 3 years and satisfy our current ID policy, proof of residency requirements and underwriting criteria.
Genuine Bargain Price is where the property is knowingly being purchased by your client below the market value. This is accepted where your client is buying from:
- A family member
- Their employer
- Their landlord, where a private tenancy exists
These applications can be submitted via NFI Online. The property ownership type ‘Genuine Bargain Price’ should be selected.
Restricted Resale Price is where a property is sold at a percentage below its open market value. There may be other restrictions applicable to the property, it is recommended that your client’s solicitor checks that it meets our requirements before submitting an application.
Once your client’s solicitor is satisfied that the restrictions on the property meets our requirements, these applications can be submitted via NFI Online. The property ownership type ‘Restricted Resale Price’ should be selected.
When your client wishes to use a non-panel solicitor, this solicitor can be instructed to act for your client only, Nationwide will nominate a separate panel firm to act for them. All legal costs charged by both firms must be met by your client.
Your client needs to call the Mortgage Servicing team on 0800 30 20 11, to request a permission to let form. After six months, a 1% loading will be added to their existing interest rate. Where Consent to Let has been approved, the client won't be able to take any additional borrowing on that property, nor are they able to take a new product while on the SVR, change the payment method or extend the term.
We hope we’ve covered most of the common questions, but if you’re still unsure about something, you can contact one of our experienced advisers on Broker Chat.