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 in the panel on the left hand side.

Showing results for F-H

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
Up to £60,000	£112
£60,001 - £100,000	£132
£100,001 - £150,000	£163
£150,001 - £200,000	£188
£200,001 - £250,000	£214
£250,001 - £500,000	£275
£500,001 - £750,000	£331
£750,001 - £1,000,000	£377
£1,000,001 - £1,500,000	£510
£1,500,001 - £2,000,000	£663
£2,000,001 - £2,500,000	£817
£2,500, 001 - £3,000,000	£970
Over £3,000,000	By Negotiation

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

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

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 may not carry out a physical valuation on all cases, but if we do 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

First Time Buyers

We define First Time Buyers (or FTBs) as customers who have never previously held a mortgage. For a joint FTB application, neither customer will have been party to a mortgage.

Flats & Maisonettes

The maximum LTV on a flat or maisonette is 95%.

Where the building is above 4 storeys the maximum LTV is 85%. This restriction does not apply to shared ownership applications.

Where the building is above 5 storeys it must be lift served.

Where the building is above 10 storeys the maximum LTV is 80%.

Ex Local Authority, Housing Association or Ministry of Defence (MoD) properties are acceptable in buildings up to 7 storeys up to 85% LTV.

Properties must be leasehold. In Scotland Absolute Ownership (Heritable) is also acceptable.

Properties with an equal share in the freehold of a block are acceptable.

Properties with external deck or ‘balcony access’ are only acceptable if built for the private sector. Where built for local authorities, housing associations or MoD they will not be accepted.

When assessing storey height we take into account any garden, basement and attic levels. Maisonettes and duplex flats over two floors are counted as separate storeys. Where there is more than one block in the development and they share a common entrance, we will use the storey height of the overall development.

Flats (Freehold)

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

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.

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)

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

Virgin Money does not differentiate between British and Irish Nationals in our lending policy.

Non-UK/Irish Nationals:

The customer(s) must have unrestricted rights to live and work in the UK. Evidence confirming their rights of indefinite leave to remain in the UK or settled or pre-settled status under the Government’s EU Settlement Scheme must be provided. In all cases Virgin Money requires a minimum three years’ UK address history.

Requirements:

• Passport or National Identity Card
• Two items confirming residence in the UK
• Evidence of 3 Years consecutive UK addresses
• A United Kingdom Residence Permit; or
• Share code so we can check the settled or pre-settled status of EEA/Swiss citizens

Furlough Scheme

Where an applicant is receiving income through the Furlough Scheme, we are not able to use their income in the affordability assessment for new customers or additional borrowing.

For existing customers making changes to their existing Virgin Money mortgage without increasing their borrowing, we can consider using income from the Furlough Scheme, subject to individual assessment.

Please use the ‘additional information’ section of the application form to tell us if any of the income details provided relate to the Furlough Scheme.

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

Greener Mortgages

Our Greener Mortgages give customers access to a range of new-build products that are priced more competitively than their equivalent Core products, rewarding customers for purchasing an energy efficient home.

To qualify, customers must be purchasing a new-build residential home with a certified or predicted energy rating of A or B. This will be evidenced by an Energy Performance Certificate (EPC), a Predicted Energy Assessment (PEA) or a Standard Assessment Procedure (SAP) calculation.

These can be obtained from the Builder (site office or sales manager) or government register and must be submitted to us as part of the mortgage application process, along with any other supporting documentation. Please also see our New Build lending criteria.

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%	£437,600
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 Consumer Price Index (CPI) plus 2%.

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
• 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.

*Regional caps apply

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