90% LTV criteria and top tips

08/12/2020

It's important you refer to our current SLAs throughout your application.

Before you submit an application, it’s very important that you check our lending criteria to prevent a frustrating delay in your case.

Checklist before submitting applications

Criteria

It's important that you check that the application meets all the criteria – if it doesn’t, the application will be declined.

The following criteria will apply to all lending greater than 85%:

Maximum term of 25 years
Houses/Bungalows only. No flats/maisonettes/coach house flats or coach houses
No New Build properties*
No income from applicants who are currently on furlough schemes – if previously furloughed, they must have returned to work fully and no longer be receiving any element of furlough income
Maximum loan £500k
We'll accept fully gifted deposits on applications up to 90%.

Please note that there is a max LTV of 85% for self-employed applications.

Schemes This will reveal additional content

Forces Help to Buy	Can be accepted where this is the only source of deposit
Shared Ownership	Available up to 90% LTV – all above criteria applies
Right to Buy	Available up to 90% LTV – all above criteria applies

Please be aware that we won’t accept appeals for cases which have declined on credit score.

Process This will reveal additional content

1. Submit a Decision in Principle – Once you’ve submitted a Decision in Principle, if the decision is 'Refer', at this stage you should STOP and wait for a Subjective Accept. If you continue to a full mortgage application before receiving a Subjective Accept, the valuation won’t be instructed until the case has been fully assessed and is deemed acceptable by our underwriters. This will mean your case will be delayed.

With many estate agents asking potential buyers to have a DIP in place before viewing homes, be sure to check our SLAs to see how quickly you’ll receive a ‘subjective accept’ decision. Remember, it’s easy to get a DIP in NFI Online. If you need a reminder, our Keying Guide can help.

2. If the case is a ‘Refer’, you’ll receive a ‘Subjective Accept’ decision via an email within our expected SLA’s. At this point the DIP won’t have been reviewed but we'll confirm the requirements needed on the case for you to submit to FMA

3. Proceed to FMA and attach the required proofs to the case

4. Valuation instructed and application sent for documents to be processed within our expected SLAs

5. Application passed to an underwriter for full review.

We need to underwrite some cases in more detail, for example, applications at 85% LTV or above and self-employed applications. To prevent delays for your clients, please see our key information for DIP refer cases.

Proofs This will reveal additional content

The standard proofs required for all applications over 90% LTV will be:

Proof of income (e.g. payslips)
3 months salary fed bank statements
Proof of deposit.

There may be additional requirements which are requested following underwriter review.

Top tips This will reveal additional content

As a responsible lender, we're applying enhanced criteria for all cases exceeding 90% LTV.

Here’s some guidance on things to look out for before submitting an application which may prevent it from being accepted:

Bank statements – we are looking to see that there are signs of affordability and good conduct

Have you got a full 3 months and do they show the salary entry for each week/month?
Have all the commitments showing on the bank statement been declared in the application? (e.g. personal loans and credit cards)
Are there any additional expenses which haven’t been declared in the application – such as travel or childcare costs?
Is the general conduct of the bank account good? Examples to look out for are – returned items (bounced payments) / reliance on overdraft / signs of financial distress
High credit utilisation – this may indicate that the applicants will not have the ability to maintain payments in the future.

Pipeline cases

Please be aware that any case which is amended after 20 July and exceeds 90% will be reprocessed under the new rules above. This means that all the above documentation will be required and all the criteria will need to be met.

If you amend the LTV above 90% and the case is referred, and subsequently declines, you may not be able to amend the case back to below 90%.

First time buyer definition This will reveal additional content

Applicants who haven’t held a mortgage in the last three years, including UK and non-UK mortgages.

To be eligible for first time buyer products all applicants must meet the first time buyer definition.

See our First time buyer page for more information

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* A 'New Build' is a property built, converted or fully refurbished, within the last two years, which has never been sold. This includes properties that have been occupied, or rented out, but still in the ownership of the builder/developer. Properties that were built, converted or fully refurbished more than two years ago are not considered New Builds.