The
maximum amount you can borrow depends
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 :
Employed - Up to £50,000
Employed - Over £50,000
Self
employed - All incomes
Loan to value
ratio (LTV):
Loans up to 75% of
property value
Loans up to 75% of
property value
Loans up to 75% of
property value
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
N/A
Gross income means basic salary and permanent allowances such as area allowance, car allowance plus half bonuses, overtime, and commission where these can be proved to be regular.
Loan to value
means the amount of loan in proportion to
the value of the property. The loan to value
is always expressed as a percentage. For
example a £75,000 mortgage on an £100,000
property would be a 75% LTV.
Affordability:
Income multipliers are only 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/shared equity 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 audited
business accounts for the past three years, and income will be taken
to mean net profit before tax and drawings.
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). Please see below for general guidance.
Advance range
Up to £150,000
£150,001
- £300,000
£300,001 - £500,000
£500,001 - £1 million
over £1 million
75% LTV
75% LTV
75% LTV
75% LTV
75% LTV
Higher
Lending Charge (If applicable): 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.
