The
maximum amount you can borrow is dependent
on a combination of how much you earn
and the value of the property.
Income
We assess the maximum we are prepared
to lend based on the following income
multiples as a rough guide:
Annual Gross Income :
Up to £50,000
Over £50,000
All incomes
loan to Value Ratio (LTV) :
Up to 75%
Up to 75%
Over 75%
Single Income :
3.5 x gross income
5 x gross income
3 x gross income
Joint Income :
3.5 x higher gross income plus 1 x lower gross income
5 x gross joint income
3 x higher gross income plus 1 x lower gross income
Or if greater :
3 x gross joint income
N/A
2.5 x gross joint income
Gross
income means basic salary and permanent
allowances such as area allowance, car allowance
and plus half bonuses, overtime, and commission
where these can be proved to be regular.
6/12/2007
Affordability
Income multipliers are a guide and the Society
will also take into account any regular
credit commitments which have 12 or more
months to run and in the case of shared
ownership mortgages - the rent and service
charges.
On the basis of the information provided
the Society will assess your ability to
afford the mortgage and consider what effect
future interest rate rises could have on
your finances. This is to help guard against
the mortgage becoming unmanageable. If the
Society has any concerns over your ability
to afford the mortgage, you will be informed
before the application proceeds to valuation.
If you are self-employed, the amount you
can borrow will normally be based on your
business accounts and income will be taken
to mean net profit before tax and drawings.
If you do not have business accounts you
can take advantage of our self-certification
scheme.
Property
value The amount we lend cannot
exceed a certain percentage of the value
of the property. This is referred to as
the maximum loan to value or LTV.
The maximum LTV depends on the particular
mortgage product chosen (see individual
product details).
Advance range
Up to £150,000
£150,001
- £300,000
£300,001 - £500,000
£500,001
- £1 million
over £1 million
95% LTV
90% LTV
85% LTV
80% LTV
75% LTV
Higher
Lending Charge If you borrow
more than 75% loan to value, a Higher Lending
Charge may be payable. This covers the cost
of an insurance policy we will take out
to protect us from the risks of lending
a high percentage of the value of the property.
If your property is repossessed by us in
the future and is sold for less than the
amount you owe us, the insurance policy
allows us to recover the shortfall from
the insurer.
You will still have to pay all the sums
due under the mortgage, including arrears,
interest and our legal fees, and so the
insurance policy does not protect you. The
insurer will be able to reclaim from you
any money it pays us under the insurance
policy.
The cost of the insurance policy is paid
by the Society for loans between 75.01%
and 90.0% of the property value. For Loans
between 90.01% and 95.0% of the property
value, the cost must be paid by you to the
Society's approved insurer. This sum will
be deducted from the cheque for the advance.
