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More improvements to our lending criteria

22 March 2019

We regularly review our lending policy, considering feedback from intermediary partners and looking at where we can make a difference. After making improvements to our lending policy last month we didn't just want to stop there.

So we have made further changes to our criteria. Take a look at what's new:

1. Making our Contractor policy simpler

Contractors earning over £50,000 per annum will now be considered if they can provide evidence of 12 months contracting experience, or a two year track record employed in the same line of work. If not, your client will be assessed on a self-employed basis.

A maximum loan to income cap of x4.49 applies where any applicant is a Contractor.

You can find full details of our new policy, including income verification requirements, by taking a look at our Contractor lending criteria.

2. Second property in the background

We've increased the maximum LTV to 90% where other residential mortgages are in the background (e.g. second/holiday home), provided the new property is to be the main residence.

We've also removed the 85% LTV cap where there are BTL mortgages in the background. Our standard LTV policy rules now apply.

3. Helping BTL portfolio landlords

We're also pleased to announce some changes to our BTL portfolio landlord policy, meaning we can say yes to more of your clients:

  • The maximum LTV allowed on the existing portfolio has increased from 70% to 75%.
  • The aggregate rental cover requirement of the existing property portfolio has reduced from 145% to 135%, calculated at an interest rate of 5%.
  • The speed of growth restriction has been removed meaning we’ll no longer decline landlords who have bought more than 2 properties in the last 12 months.

4. Committed to self-employed

We've made some changes to the supporting documentation we need for applications from self-employed clients:

  • Where income is from a limited company we will now ask for 2 years' full accounts. We will no longer ask these clients for bank statements (previously requested where the shareholding was less than 100%).
  • Where your client is a sole trader or in a partnership, we will ask for 3 months' personal or business bank statements to demonstrate turnover.
  • Accountant's certificates will no longer be used to evidence income.

5. Additional borrowing for Help to Buy customers

Additional borrowing is now available for existing Virgin Money Help to Buy Equity Loan customers when renewing their mortgage deal, to fully or partially staircase out of the scheme (subject to our current product transfer lending policy). Applications for additional borrowing can only be made over the telephone with our dedicated support team. For further information regarding the process and available products please contact your BDM.

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