Lending policy

View our full intermediary lending policy online

Important information - changes to product offering and policy requirements

Some changes to our product range and policy requirements are currently in place.

We’re continuing to monitor the situation closely and we’re working hard to support you and your customers during these difficult times.

For a full update of all changes please view our dedicated update page.


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 between 85% and 95% is available to both remortgage and purchase customers. On a New Build house the customer must provide a minimum 10% deposit from their own resources.

Capital raising is not available for any customers looking to take a remortgage greater than 90% LTV.

Where the LTV is above 85%, the whole of the mortgage must be taken on a repayment basis, and the following conditions must be met:

  • Minimum of three items of active credit, or one item which is greater than six months old
  • Customers must be up to date on all credit at the point of application
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 Companies the last two years’ full accounts 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 be unable to lend.

If the company's net worth has been negative in the last two years, Virgin Money would 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 valueValuation or purchase price, whichever is lower
£0 - £500,000£500,001 - £750,000£750,001 - £1,250,000>£1.25m
Purchase and RemortgageInterest only75%75%75%75%
Repayment95%85%80%75%
BTL maximum loan to valueValuation or purchase price, whichever is lower
£0 - £437,500>£437,500
Non Portfolio BTL*Interest only80%75%
Repayment80%75%
BTL PortfolioInterest only75%75%
Repayment75%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 restrictions also apply. Please see Maximum LTV section.

A maximum loan to income multiple of x4.49 applies where one or more applicant is self-employed or a contract worker.

A maximum loan to income multiple of x4.00 applies to interest only and part and part loans.

For all other loans a maximum loan to income multiple of x5 applies.

The above income multiples are based on our usual allowable types of income, e.g., 60% of bonuses.

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.

  • For new build applications, a product from the New Build 90% LTV range will need to be selected.
  • Maximum LTV on new build flats is 75% for Residential and BTL
  • Maximum LTV on new build houses is 90% for Residential and 80% for BTL
  • Help to Buy: equity loans are available for first and next-time buyers with smaller deposits
  • 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

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 without affecting the loan amount. 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. For houses, where the LTV is greater than 85%, cash incentives of 1% (max £5,000) of the property value are acceptable.

Acceptable cash incentivesHouses & Flats up to 85% LTVHouses over 85% LTV
Cashback dealsyesyes
Stamp Duty (Land and Buildings Transaction Tax in Scotland) paidyesyes
Payment of fees to professionals, such as solicitors and valuersyesyes
Guaranteed rental payments for a period after completionyesNo
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)yesNo

Non-cash incentives

Acceptable non-cash incentivesHouses & Flats up to 85% LTVHouses over 85% LTV
White goods (where not included as standard specification)yesyes
Carpets and curtainsyesyes
Kitchen upgrade (including tiling and worktops)yesyes
Bathroom upgradeyesyes
All electric upgrades (i.e. additional sockets, TV points, etc)yesyes
Turf and landscapingyesyes

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.

Help to Buy: equity loans

If a property is being purchased through one of the government Help to Buy Equity Loan schemes, incentives of any kind (cash and non-cash) cannot be more than 5% of the value of the property.

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
  • Certification by certain professional consultants may be accepted subject to it being in standard Council of Mortgage Lenders (CML) format, where the property has been built/converted within the last 10 years.
Non-EEA Nationals

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

Requirements:

  • Passport or National Identity Card
  • Home Office approval or Unrestricted work
  • Two items of ID confirming residence in the UK
  • Must have evidence of three years consecutive UK addresses