Lending policy

A-Z lending policy

The purpose of this search facility is to provide guidance on Virgin Money's Lending Criteria. You can either browse alphabetically or enter a keyword you would like to search from the panel on the left hand side.

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Family Purchase

Available to first time buyers and next time buyers providing a bankruptcy search and declaration of solvency on the seller is completed, or defective indemnity insurance is arranged by the acting solicitor against the full market value of the property.

Where the property is being sold at a discounted price Virgin Money will lend up to the lower of:

• 100% of that discounted price, or
• The maximum LTV permitted on valuation

Additional lending up to maximum LTV limits is allowed providing the extra funds are solely for home improvements. If lending exceeds the discounted price a retention may be held.

We will not accept an application where the vendor continues to live in the property being sold.

Fees

If a fee is required and we don’t have payment details or are unable to collect them the application will be cancelled after 14 days. We will contact you to let you know if there are any issues collecting these.

Valuation Fees

Valuation/Purchase Price	Basic Valuation Report fee	HomeBuyers Report fee
Up to £60,000	£112	£270
£60,001 - £100,000	£132	£311
£100,001 - £150,000	£163	£352
£150,001 - £200,000	£188	£398
£200,001 - £250,000	£214	£444
£250,001 - £500,000	£275	£510
£500,001 - £750,000	£331	£561
£750,001 - £1,000,000	£377	£612
£1,000,001 - £1,500,000	£510	£817
£1,500,001 - £2,000,000	£663	£1,021
£2,000,001 - £2,500,000	£817	£1,225
£2,500, 001 - £3,000,000	£970	£1,531
Over £3,000,000	By Negotiation	By Negotiation

For residential and BTL remortgages on properties valued over £3m, where the customer has chosen a product with a valuation incentive, Virgin Money will negotiate the cost of the valuation report with our suppliers. We will pay the first £970 of the valuation report fee and any amount above this must be paid by the client.

The Basic Valuation Report fee includes the VAT charged to Virgin Money by the valuer.

The Homebuyers Report fee is made up of two elements:

1. the Basic Valuation Report fee (as above)
2. the additional cost of the HomeBuyers Report, on which VAT is charged to the applicant

Please note that the Valuation Fee(s) above are based on the actual property valuation.

The Custom Build Valuation fee is £557.

If the instructed valuer values the property at a figure which differs from the purchase price/estimated value stated on your mortgage application form, the fee payable may change in accordance with the table above.

In the event the property is valued at a figure higher than that stated on the mortgage application form, the difference between the Valuation Fee payable and the actual amount paid prior to the valuation will be payable prior to the issue of an Offer.

In the event the property is valued at a figure lower than the figure stated on the mortgage application form, the difference will be refunded to you.

Please note, a mortgage exit fee of £50 will be payable on redemption of your client's mortgage to cover the administrative cost incurred by Virgin Money. This fee will be applied if the mortgages is redeemed or ported before the full mortgage term ends.

Your client's solicitor, licensed or qualified conveyancer may make an additional charge for their work in relation to redemption of the mortgage and discharge of the security.

For product transfer applications we will usually calculate the LTV using an index-linked valuation or AVM. In some instances we may need to carry out a full valuation, but we will always let you know in advance.

Financial Commitments

All financial commitments as well as regular and essential household expenditure will be taken into account when assessing the customer's affordability. In order to obtain an accurate lending decision for the customer please provide details of the following:

• Unsecured loans
• Hire purchase/contract hire
• Revolving debt (credit cards, store cards, mail order, overdrafts)
• Second charge loans
• Other mortgages (BTL's need not be included provided the rent covers the mortgage payment by 145%)
• Help to Buy Equity Loans
• Child support/maintenance

Flats

In England, Wales & Northern Ireland flats and maisonettes must be leasehold.

Leasehold flats with an equal share in the freehold of the block are acceptable subject to satisfactory valuation report and valuer comment.

In Scotland flats must be Absolute Ownership (Heritable) or leasehold.

Virgin Money does not accept freehold flats except in the Tyneside flat scenario where there are reciprocating lease/freehold arrangements.

Flats are acceptable in blocks up to a maximum of 10 storeys across the UK. In the following areas of London, we will accept an unlimited number of storeys.

• The City of London
• Canary Wharf
• London Boroughs - Camden, Greenwich, Hackney, Hammersmith & Fulham, Haringey, Islington, Kensington & Chelsea, Kingston upon Thames, Lambeth, Richmond upon Thames, Wandsworth and Westminster.

Ex Local Authority, Housing Association or Ministry Of Defence (MOD) flats are acceptable in blocks to a maximum of three storeys subject to satisfactory valuation report and valuer comment.

Flats in blocks above five storeys must be lift served.

Flats must have separate bedroom accommodation. Studio flats are not acceptable to Virgin Money.

New Build flats are acceptable to Virgin Money, subject to them having the benefit of an acceptable New Build Warranty or Professional Consultants Certificate in standard CML format, fulfilling lending policy requirements and satisfactory valuation report & valuer comment

Flats or maisonettes situated over or adjacent to retail or commercial premises are acceptable to Virgin Money in London (defined as being within the boundary of the M25) subject to satisfactory valuation report and positive valuer comment. Flats or maisonettes over or adjacent to retail or commercial premises in the remainder of England, Wales and Northern Ireland are not acceptable.

Traditional tenement flats or maisonettes in Scotland, situated above retail or commercial premises are acceptable to Virgin Money if situated in central areas of Edinburgh, Glasgow, Dundee, Aberdeen, Inverness, Stirling and Perth, subject to satisfactory valuation report and valuer comment

Flats with external deck or ‘balcony access’ are acceptable if built for the private sector subject to satisfactory valuation report and valuer comment

Flats with external deck or ‘balcony access’ are not acceptable if built for local authorities, housing associations or MOD and will be declined

Converted flats are acceptable in blocks up to a maximum of 10 storeys across the UK (unlimited in London Boroughs – refer to the list above) subject to the following:

• If the flat has been converted or first occupied in the last 24 calendar months it is classed as new build. Virgin Money will not lend over 75% LTV on this type of property until at least 24 months from the date of completion or 1st occupation. This includes additional borrowing by way of PSL or Mortgage Review
• If the flat has been converted in the last 10 years it must have the benefit of an acceptable New Build Warranty or Professional Consultants Certificate in standard CML format

Please note where the building is above 10 storeys the maximum LTV will be restricted to 80%.

Flats (Freehold)

Freehold flats are only acceptable where there are reciprocating lease/freehold arrangements (such as Tyneside Flats)

Flats in Greater London

Ex Local Authority, Housing Association, or Ministry of Defence (MOD) flats are acceptable in blocks up to a maximum of three storeys, subject to satisfactory valuation report and valuer comment.

Flats are acceptable in blocks up to a maximum of 10 storeys across the UK. In the following areas of London, we will accept an unlimited number of storeys.

• The City of London
• Canary Wharf
• London Boroughs - Camden, Greenwich, Hackney, Hammersmith & Fulham, Haringey, Islington, Kensington & Chelsea, Kingston upon Thames, Lambeth, Richmond upon Thames, Wandsworth and Westminster.

Any flats in blocks exceeding five storeys must be lift served.

Please note where the building is above 10 storeys the maximum LTV will be restricted to 80%.

Flexible Features

Depending on the product selected, your customer may be able to take advantage of a range of flexible features. The use of these features is subject to Virgin Money's prior agreement and may be considered if the account is:

• Up to date (no arrears)
• Making full contractual payments (not in a payment arrangement)
• Not subject to IVA or Bankruptcy proceedings

Please check the individual terms and conditions for your customer's product to check which features are available to them.

Flooding

Where a property has previously been affected by flooding or is situated on a flood plain, the property is acceptable to Virgin Money, subject to a satisfactory valuation report and positive valuer comment.

The applicant must be able to obtain full buildings insurance including all perils, subject to a maximum flooding excess of £1,000.

If full buildings insurance including all perils is not available as described the property is not acceptable and will be declined. Policy exceptions will not be approved to override these policy requirements.

Foreign Currency

Residential Applications

We do not offer foreign currency loans.

For all residential loan applications the income being used to assess affordability must be paid in GBP / £Sterling and we will require evidence of this income.

Where your client is paid in both Sterling and a foreign currency, we will only consider their Sterling income for the purposes of affordability.

Buy-to-Let Applications (including Consumer Buy-to-Let)

We will continue to accept non-Sterling income for minimum income requirements on buy-to-let applications.

If a customer is receiving rental income from their buy-to-let property in a currency other than GBP £Sterling, this will not be acceptable income for assessing affordability.

Repayment Strategies for Interest Only loans

For both residential and buy-to-let loans, we will not accept repayment strategies denominated in a foreign currency to support an interest only loan.

Foreign Nationals

EEA Nationals

Virgin Money does not differentiate between a British National and a European Economic Area (EEA) National in our lending policy i.e. in all cases Virgin Money requires a minimum of three years UK addresses.

Due to EEA and or EU agreements Nationals of the following countries will be treated as EEA Nationals for Mortgage purposes:

• Iceland
• Liechtenstein
• Norway
• Switzerland

Non EEA Nationals

The customer(s) must have unrestricted rights to live and work in the UK.

Requirements:

• Passport or National Identity Card
• Two items of ID confirming residence in the UK
• Must have evidence of 3 Years consecutive UK addresses

Gifted Deposits

Where the deposit is being gifted, the person or persons, gifting the deposit need to complete our Gifted Deposit Form (below). This confirms that the deposit monies are a gift and the person does not expect to be repaid these monies either whilst the borrower(s) owns the property or upon its sale.

The below form should be filled out and returned to Virgin Money;

• Gifted deposit template (218KB) PDF

Guarantor Mortgages

We don’t offer guarantor mortgages.

Help to Buy Equity Loan schemes

Help to Buy Equity Loans are designed to help home buyers with smaller deposits buy a new build home in England, London, Scotland or Wales.

An equity loan allows a customer to buy a new-build home with just 5% deposit. The Government lend up to 40% of the property value, with a mortgage making up the remaining funds. The scheme allows customers to:

• Purchase a newly built home with a smaller deposit
• Keep initial monthly costs down as the equity loan is fee-free for the first five years.

Help to Buy Equity Loan Scheme	Minimum Deposit	Equity Loan (up to)	Mortgage (up to)	Maximum Property Value	VM Product Available
					55% LTV	75% LTV	80% LTV
England	5%	20%	75%	£600,000
London	5%	40%	75%	£600,000
Scotland	5%	15%	80%	£200,000
Wales	5%	20%	75%	£300,000

The Equity Loan is interest free for the first five years. From year six the customer is required to pay an annual fee to the government which is 1.75% of the outstanding equity loan amount. The interest rate will then increase on an annual basis in line with the Retail Price Index (RPI) plus 1%.

In order to qualify for an equity loan the customer must meet the following criteria:

• Only available for new build properties
• Maximum LTV of 75% in England, London and Wales. In Scotland the maximum LTV is 80%
• Available only for residential first time buyers and next time buyers
• Not available for Buy-to-Let
• The mortgage must be arranged on a Capital and Interest Basis
• The customer cannot have an interest in any other property (i.e. running two mortgages, BTL in background)
• Guarantors are not permitted
• If your client is offered any kind of incentive (cash and non-cash) from the builder or developer to purchase the property, this cannot be more than 5% of the value of the property. Please note, part-exchange is not available on an Equity Loan. For more details of the incentives we accept, please view the incentives section.

Additional borrowing for existing Virgin Money Help to Buy Equity Loan customers is available, subject to our standard additional borrowing policy criteria. Additional borrowing is only available to ‘Staircase’ out of the Equity loan (either fully or partially).

When submitting a Help to Buy Equity Loan product transfer application with additional borrowing, we’ll ask to see a copy of the settlement figure and a copy of the customer's RICS valuation.

To ensure that the Equity Loan is affordable to the customer VM assume an annual fee of 3% of the Equity Loan spread over a year as a monthly financial commitment.

Example:

Equity Loan: £40,000

Annual Fee assumed (3%): £1,200

Monthly Payment: £100

Holiday Home Purchase

The following conditions must be satisfied where the property being purchased is intended to be a holiday home:

• Maximum LTV 75%
• Timeshares will not be considered
• The customer must be able to afford all credit commitments including any mortgages