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.

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LTVs over 85%

Residential lending over 85% LTV is available on full repayment for properties with a maximum value of £600k.

• Available for houses and flats. Flats must be in buildings with four stories or fewer and must not be ex-local authority or ex-MOD.
• New build houses acceptable up to 90% LTV (95% for Shared Ownership). New build flats restricted to 80% LTV.
• Available for purchase and remortgage. Where the LTV is over 90% we’re unable to offer capital raising during a remortgage.
• Customers must have a minimum of three items of active credit, or one item which is greater than six months old.

Leasehold

Leasehold properties must have an unexpired term of at least 85 years at the point of application.

In all instances a satisfactory valuation report is required before Virgin Money will confirm a property is acceptable.

Let to Buy

Virgin Money will consider Let to Buy applications, either the residential purchase of the new property, or the BTL remortgage of the customers current residence.

Where the security offered to Virgin Money is a residential property:

• The existing property must be proposed to be let on a formal recognised tenancy basis
• Rental income must be at least 145% of the existing mortgage payment in order to be considered as self-supporting
• If the other mortgage is not self-supporting the shortfall will be taken into account within the affordability calculation
• Deposit monies must be from customers own resources
• The mortgage payment and rent on the BTL must be evidenced with one or more of the following:

To confirm the monthly rental income we will require:

• A current Assured Shorthold Tenancy agreement (or Scotland / Northern Ireland equivalent)
• A bank statement to evidence the rent
• A letter from a reputable letting agent which would include:
  • Members of Association of Residential Letting Agents (ARLA)
  • Members of The Property Ombudsman scheme
  • Members of The Royal Institution of Chartered Surveyors (RICS)

To confirm the monthly mortgage payment we will require:

• A copy of the new BTL / Consent to Let offer (if letting proposed is new and the mortgage payment is clearly evident)
• Latest mortgage statement (for existing BTL)

Where the security offered to Virgin Money is a Buy to Let property:

• A simultaneous completion must be made on a new residential property
• Standard Buy to Let criteria applies

Letting to a Family Member (Regulated Buy to Let)

Although Buy to Let mortgages are not regulated, scenarios where the tenant of the property is the customer's immediate family (e.g. parent, grandparent, child, grandchild, brother, sister) are regarded as regulated loans therefore they must proceed on a standard residential product.

The following restrictions apply:

• Maximum LTV 80% (LTV restrictions also apply, please see Maximum LTV section).
• Affordability will be assessed as per our residential lending policy. The customer must be able to afford the repayments (including any other mortgage payments) without taking into account any rent received. Repayment vehicles for Interest Only mortgages must follow our residential lending policy.

Limited Company

The Directors remuneration can be taken into account as income along with their share of profit after corporation tax. However we do not allow dividends for limited companies. For Limited Company Directors the last two years’ full accounts and latest month’s business bank statements will be required. We will also request an accountant’s covering letter on your behalf.

If net profits are increasing - The average of the Directors remuneration and share of net profits over the past two years will be used.

If net profits are decreasing - The most recent year's share of profits plus the individual Directors remuneration for that year will be used.

If the company has made a loss within the last two years, Virgin Money would usually be unable to lend.

If the company's net worth has been negative in the last two years, Virgin Money would usually be unable to lend.

The net profits of a limited company are often referred to as profit after corporation tax.

Please note - If the customer is classed as self employed by way of having a 20% or more shareholding in a Limited Company, HMRC SA302's are not acceptable as income verification.

Limited Liability Partnership

Customers who have a shareholding in a large LLP (e.g. Accountancy / Law firms) can be classed as self-employed providing the following criteria is met:

• They must have continuous employment with their firm for a minimum of two years as an employee or shareholder
• If their income has increased over the last two years, an average will be used for affordability
• If their income has decreased over the last two years, the most recent year will be used for affordability

Maximum LTV

Residential maximum loan to value		Valuation or purchase price, whichever is lower
		£0 - £600,000	£600,001 - £750,000	£750,001 - £1,250,000	>£1.25m
Purchase and Remortgage	Interest only	75%	75%	75%	75%
	Repayment	95%	85%	80%	75%

BTL maximum loan to value		Valuation or purchase price, whichever is lower
		£0 - £437,500	>£437,500
Non Portfolio BTL*	Interest only	80%	75%
	Repayment	80%	75%
BTL Portfolio	Interest only	75%	75%
	Repayment	75%	75%
*Max LTV is 75% where personal income is used.

There is no LTV restriction for existing mortgage customers applying for a pound for pound product transfer.

The maximum LTV for existing residential customers seeking additional borrowing is 85% (other restrictions may apply), except for the purpose of debt consolidation where a maximum of 80% LTV applies.

There is no maximum loan size on pound for pound product transfers.

Maximum LTV on Interest Only

The maximum LTV for residential customers taking a mortgage on an interest only basis is 75%. For residential customers taking a part and part mortgage, the maximum LTV is 85%, of which up to 75% LTV can be on interest only. Where residential borrowing exceeds 85% LTV, the whole mortgage must be taken on a full repayment basis.

The maximum LTV for BTL customers taking a mortgage on an interest only basis is 80%. For BTL customers taking a part and part mortgage, there is no restriction on the maximum interest only element.

Maximum Loan

The maximum loan on Residential applications is £2million, and for BTL applications it's £1million. LTV and income restrictions apply. Please refer to the Maximum LTV section and Income and Affordability.

New Build

We define new build as a property where construction is completed and/or the property is first occupied, in the last 24 calendar months.

• Maximum LTV on new build flats is 80% for residential and 75% for BTL
• Maximum LTV on new build houses is 95% for residential shared ownership / 90% for residential non-shared ownership and 80% for BTL.
• Requirement for the acting solicitor to confirm the property has been satisfactorily completed and that a New Build Warranty acceptable to Virgin Money is in place
• We will lend up to a maximum of 20% of the units in any one block / development
• Our Greener Mortgages are available on new build, residential properties with an energy efficiency rating of A or B. See the Greener Mortgages section for more details.

Clients buying a new build property may receive an incentive from the builder or developer to purchase the property. This must be declared at the time of application, or later if the incentive changes.

Cash incentives

Cash incentives of up to and including 5% of the purchase price are acceptable up to 90% LTV without affecting the loan amount. For LTVs up to 90% where the value of the cash incentive is greater than 5%, the balance of the incentive above 5% must be deducted from the purchase price when calculating the maximum loan amount. Where the LTV is greater than 90%, cash incentives must be deducted from the purchase price when calculating the maximum loan amount.

Acceptable cash incentives	Houses & Flats up to 90% LTV	Houses over 90% LTV*
Cashback deals
Stamp Duty (Land and Buildings Transaction Tax in Scotland) paid
Payment of fees to professionals, such as solicitors and valuers
Guaranteed rental payments for a period after completion
Gifted deposit from the builder or developer(please note, family gifted deposits are acceptable in line with standard policy and do not need to be deducted from the purchase price)

Non-cash incentives

Acceptable non-cash incentives	Houses & Flats up to 90% LTV	Houses over 90% LTV*
White goods (where not included as standard specification)
Carpets and curtains
Kitchen upgrade (including tiling and worktops)
Bathroom upgrade
All electric upgrades (i.e. additional sockets, TV points, etc)
Turf and landscaping

*Up to 95% LTV on new build houses is only available for Shared Ownership, otherwise the maximum LTV is 90%.

Part-exchange transactions

Where the builder or developer is purchasing the customer’s existing residential property part-exchange transactions are acceptable. We will accept this in addition to cash and non-cash incentives.

Part-exchange is not available on a Help to Buy: equity loan.

For full details, please view the incentives section.

Offer – New Build

Please note the Offer for a new build property is valid for 30 weeks (seven months). If an extension is required beyond this time, a further 30 weeks (seven months) extension can be granted subject to the application being re-underwritten against current lending policy. The customer will also be required to choose a new mortgage product from those currently available.

For further details, please view the Offers section of our A-Z Lending Policy.

New Build Warranty

An acceptable New Build Warranty must be in place for any property which has been built or converted in the last 10 years, or is to be occupied for the first time. Acceptable warranty schemes are:

• NHBC
• Premier Guarantee
• LABC New Home Warranty
• BLP (Building Life Plans)
• Build-Zone
• Castle 10 / Checkmate
• Zurich New Build (Zurich withdrew from the market 30 Sept 09)
• Build Assure
• Global Home Warranties
• International Construction Warranties (ICW)
• Advantage HCI
• Aedis
• Protek
• Q Assure
• We will also accept a UK Finance standard professional consultant’s certificate issued for a single dwelling, or for a flat which has been converted from a single dwelling. They are not acceptable on new build flats or other developments of more than one dwelling. This is subject to meeting the requirements listed under section 6.7 of the UK Finance handbook for England and Wales and Scotland or section 6.6 for Northern Ireland, which include the consultant having appropriate professional indemnity insurance and belonging to an approved professional body.
  
  We do not accept warranties or professional consultant’s certificates that are offered retrospectively.

Non-EEA 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