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Lending policy

View our full intermediary lending policy online

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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Offer Extensions

An Offer is valid for 16 weeks (four months) from the date of issue.

Offer extensions can only be considered where there has been a delay in the sale of the existing property or purchase of the new property.

When an extension is requested:

  • The loan must be re-underwritten against current policy rules and taking into account the customer's current circumstances.
  • A new credit score, and affordability assessment must be performed to consider extending the Offer.
  • The request must be referred to a Senior Underwriter to establish if a new valuation is required. Mortgage offers can only be extended once for a further eight weeks, after which the customer must reapply.

Offer extensions – new build

An Offer for a new build property is valid for 30 weeks (seven months).

We will be able to provide an Offer extension for seven months subject to the application being re-underwritten against current lending policy.

  • A new credit score, updated affordability, income verification and an update of any requested supporting documentation requested in the original application.
  • A referral to the valuer seeking confirmation the property value provided in the original Mortgage Valuation remains appropriate. If the valuer provides an updated property valuation, lending must be calculated using the lower of the updated valuation or purchase price.
  • The customer will also be required to choose a new mortgage product from those currently available.

Please note, when assessing a new build Offer extension, your client will not be charged an additional valuation or Application Fee.

Offer extensions – Shared Ownership

Our Offer for a Shared Ownership mortgage is valid for 26 weeks (six months). If an extension is required beyond this time, a further six month extension can be granted subject to the application being re-underwritten against current lending policy.

Offer extensions – custom build

An Offer for a custom build mortgage is valid for 16 weeks (four months) from the date of issue.

We will be able to provide an Offer extension for two months subject to the application being re-underwritten against current lending policy.

  • A new credit score, updated affordability, income verification and an update of any requested supporting documentation requested in the original application.
  • A referral to the valuer seeking confirmation the property value provided in the original Mortgage Valuation remains appropriate. If the valuer provides an updated property valuation, lending must be calculated using the lower of the updated valuation or purchase price.

Please note, when assessing a new build Offer extension, your client will not be charged an additional valuation or Application Fee.

Overpayments Everyday Products

Your customer(s) are able to make overpayments of up to 10% of their outstanding balance per calendar year without incurring an Early Repayment Charge.

Overpayments Flexible Products

This allows your customer to make unlimited, penalty free overpayments, either monthly or in a lump sum provided the mortgage is not redeemed in full.

Parental Leave

If a customer is anticipating a temporary reduction in their income, for example when on parental leave, the customer's return to work salary will be used for affordability purposes providing the customer is due to return to work within the next three months.

For periods of absence between four and twelve months, the customers return to work salary will be used, providing the customer evidences how they intend to cover the shortfall in income e.g. savings. The shortfall is defined as the lower of the total contractual mortgage payment or the reduction in net income, for the total period of absence.

The below examples show how we would calculate the shortfall:

  • The customer will experience a drop in income of £300 for six months and the contractual mortgage payment is £700. Required savings = £1,800 (£300 x six months)
  • The customer will experience a drop in income of £1,000 for five months and the contractual mortgage payment is £600. Required savings = £3,000 (£600 x five months)

We will require evidence of how the customer will cover the shortfall, including savings accounts, bank statements and share certificates. Please note these can be in the name of either borrower, if a joint application.

When a customer is on or due to go on maternity leave the dependant field must be updated accordingly and childcare costs included as part of the customer’s regular and essential expenditure, or an explanation provided as to why they do not apply.

For all periods of absence the customer and the employer must provide confirmation of the return to work date and salary. Where confirmation is not received from the employer any unsustainable income, such as maternity or sick pay, will be excluded for affordability purposes.

Pensions

Pension Income

Where the term of the mortgage takes the customer beyond their anticipated retirement age, or the customer is already retired, then details of pension income are required.

The maximum age we will consider accepting employed income is age 67 unless the customer declares a lower anticipated age of retirement.

Acceptable pension income paid in GBP / £Sterling is:

  • Occupational pension (final salary, money purchase)
  • State pension
  • Annuities
  • Personal pension plan e.g. Stakeholder Pension, SIPP (Self Invested Personal Pension)
  • Pension Tax Credits

The pension scheme must be approved by HM Revenue & Customs (HMRC).

Evidence of Pension Income

Evidence of pension income and confirmation it is paid in GBP / £Sterling must be in the form of one of the following:

  • Latest annual pension statement (must be dated in last 12 months)
  • Latest pension slips
  • Latest months bank statements showing pension credits
  • Latest P60 or HMRC SA302 and corresponding Tax Year Overviews.*
  • Pension Tax Credits

The pension scheme must be approved by HM Revenue & Customs (HMRC).

Please note, if a pension slip is provided to support the application and this clearly states what the customers annual pension is then it can be accepted in lieu of an annual pension statement.

Pension Contributions

Contributions to Private Pensions, Company pensions and Additional Voluntary Contributions (AVC’s) must be included as expenditure for the purposes of affordability.

See the Expenditure Section for more details.

*HRMC SA302’s and corresponding Tax Year Overviews are acceptable if printed by HMRC or from your customers online HMRC Account. The Tax Calculation document printed from the customer's online account must indicate the tax return is 100% complete for each year evidenced.

Porting

Products launched before 12 May 2008
Customers who completed onto products launched prior to 12 May 2008 will be able to port their existing mortgage balance or a reduced balance, subject to any applicable Early Repayment Charge. If your client requires additional borrowing to purchase their next property, they will be able to apply for the additional amount at the same rate as their existing product. Applications must fit all lending criteria, including maximum LTV, credit scoring and affordability assessments.

Products launched on or after 12 May 2008
Customers who completed onto products launched on or after 12 May 2008 will be able to port their existing mortgage balance or a reduced balance subject to any applicable Early Repayment Charge.

If your client requires additional borrowing to purchase their next property, they will be able to apply for a new product for the additional amount from the purchase product range available at that time. The additional borrowing product must be from the same product family as the main loan i.e. Everyday or Flexible.

  • Existing Customers Moving Home and taking an entirely new product
    All customers who are moving home also have the option to take a new mortgage product from our prevailing range for the entire loan for their new property. Provided the new loan completes within three months of redemption of the existing loan they may receive a refund of 50% on any applicable Early Repayment Charge, subject to their original terms and conditions.
  • Customers redeeming and completing on different days
    If a customer does not repay the loan on their property on the same day as they complete the loan on the next property, then any applicable Early Repayment Charge will be payable in full on the day they redeem. If they complete the loan on the next property within three months of redeeming then the Early Repayment Charge will be refunded. If there is a reduction in the balance, any applicable Early Repayment Charge will be payable on the difference.

    Please refer to the Offer documentation issued to your client(s) for confirmation of their terms and conditions when moving home.

Please note the cashback incentive offered on selected products is not available to customers who are porting, including when taking additional borrowing.

Procuration Fees

If your clients choose to take an entirely new mortgage product from our current range for all borrowing, or transfer the remaining terms and conditions of their current product to their new property, you will be entitled to the full procuration fee for that product.

Please refer to your club or network for details of our procuration fee package.

Porting Additional Borrowing

Porting applications with additional borrowing, where the additional borrowing is on a separate product to the main mortgage loan must use a paper application.

Porting Early Repayment Charges

If redemption of the existing Virgin Money plc mortgage and the completion of the new loan take place simultaneously and there is no reduction in outstanding balance then no Early Repayment Charge or Help with Costs repayment will be payable.

If redemption of the existing Virgin Money plc mortgage and completion of the new loan do not take place simultaneously then any applicable Early Repayment Charge and Help with Costs repayment will be charged and subsequently refunded on completion of the new mortgage, providing this takes place within three months and there is no reduction in the outstanding balance.

If the new loan amount is lower than the outstanding balance of the existing mortgage, the customer will be required to pay an Early Repayment Charge on the reduction in balance subject to the terms and conditions of their mortgage product.

Premium Leases

Premium leases occur where the tenant pays rental income to the landlord in advance resulting in a long-term rental agreement.

These situations will always be referred to an underwriter where additional conditions may apply.

Probation

Virgin Money will consider probationary income where the customer has a track record of income, from a similar line of work, or where permanent status is confirmed by the employer. To establish a track record of employment the last two years P60s must be provided.

Procuration Fees

Procuration fees are available for new business mortgage completions up to and including 95% LTV (including existing Virgin Money mortgage customers moving home) and all Product Transfers.

There is no cap on our maximum procuration fee amount.

Contact your dedicated Business Development Manager for more information or for details of our procuration fee package please refer to your club or network.

Professional Sportsperson / Entertainers

For applicants classed as a professional sportsperson / entertainer the following criteria will apply:

  • Maximum LTV is 75%
  • The applicant must have at least 12 months to run on their existing contract
  • A copy of their contract and / or two years of business accounts will be required
  • All cases will be referred to an Underwriter
Properties

Standard Properties

Properties should be of conventional construction.

A property is considered to be of conventional construction if it is built of stone, natural stone, reconstituted stone, Cob & Flint, Modern Timber Frame, concrete block and/or brick, with either solid or cavity walls that consist of an inner and outer skin. The outer skin will usually be of stone, brick or block. The roof will be of slate, tile, thatch or felt.

The following forms of construction are considered as acceptable:

  • Cavity outer walls of brick or stone with inner walls of brick or block
  • Cavity outer walls of brick, stone or concrete block rendered with inner walls of brick, stone or block
  • Timber framed property with outer walls of brick or stone built 1970 or after
  • Timber framed property with rendered outer walls of brick, stone or block built 1970 or after
  • Craft techniques and period timber framed dwellings built prior to 1900
  • For Pitched Roofs, Tiles, slate, thatch or copper
  • For Flat Roofs, Copper, lead, zinc, asphalt or mineralised felt

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

We will lend up to a maximum of 20% of the units in any one block / development.

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

Non Standard Properties

Some properties constructed using non conventional methods of construction may be acceptable to Virgin Money subject to a satisfactory valuation report and valuer comment.

These include properties falling into the following construction types:

  • Prefabricated Reinforced Concrete (PRC)
  • Insitu Poured Concrete
  • Steel Framed
  • Timber Framed
  • Craft Techniques and period timber framed dwellings
  • Mundic properties
  • Modern Methods of Construction (MMC)

If you believe a property is of non standard construction please contact us for clarification prior to submitting an application.

In all cases a satisfactory valuation report and positive valuer comment is required before Virgin Money will confirm a property is acceptable.

For full details of our policy criteria for flats and apartments, please view the Flats section.

Unacceptable Properties

The following property types are considered unacceptable for mortgage purposes. This is not an exhaustive list:

  • Houses in multiple occupation (HMO)
  • Leasehold properties must have an unexpired term of at least 85 years at the point of application.
  • Mobile Homes/Caravans/Park Homes/Houseboats
  • Working Farms, Smallholdings and Houses subject to an Agricultural Occupancy Restriction
  • Affordable Housing properties (except Shared Ownership)
  • Uninsurable properties
  • Properties built using high alumina cement or Mundic properties where the property is not graded A1, A2 or A3 following a Petrographic Test
  • Flats above shops/commercial premises (exceptions apply)
  • Freehold Flats (except Tyneside flat scenario)
  • Properties with a gross internal floor area of less than 30m2 not including balconies or covered external areas
  • Studio Flats
  • Landlocked properties
  • Properties constructed using Large Panel Systems (LPS)
  • Live/Work Units
  • Properties adapted or altered for commercial use
  • Prefabricated Reinforced Concrete (PRC) Homes not repaired under an approved scheme and / or where the adjacent property has not been repaired.
  • Properties with Overage Clauses (except Custom Build)
  • Properties with Pre-emption clauses (except Shared Ownership)
  • Properties with ongoing structural issues
  • Properties with more than five acres of land as part of the title
  • Properties where power lines or electricity supply apparatus are located directly over and/or on the site which are not for domestic supply to the subject property
  • Properties with more than one annexe
  • Properties not recommended as suitable security by the valuer
  • Timber frame properties constructed between 1900 and 1969 for the private or public sector.

Property Issues

The following non exhaustive list which refers to the more common property matters which may be raised either within the content of the Mortgage Valuation Report or subsequently by the acting solicitor. These may require further underwriting as part of the processing of a mortgage case.

  • Adverse comments regarding the property’s suitability for mortgage purposes
  • Proximity to high voltage electrical supply apparatus (including overhead/nearby power cables, sub stations, transformer houses and communications masts)
  • Adverse findings within a mining search (e.g. presence of a mineshaft in proximity to the property)
  • Flooding
  • HS2 or other large infra structure projects
  • Adverse findings within an enviro search where obtained (e.g. reference to contaminated land that has not been subject to remediation)
  • Section 106 Agreements affecting a property
  • Reference to hazardous materials including asbestos, methane gas and radon gas
  • Deficiencies in the title to the property
  • Short leases i.e. properties with unexpired lease terms of less than 70 years at the point of application will not be considered acceptable security

Where any of these issues may be suspected on a case, please contact your BDM to discuss before submitting your application.

Purpose of Loan

Capital raising is permitted however customer(s) cannot borrow additional money for the following:

  • Debt consolidation is not permitted on an interest only basis
  • The purchase of a Time Share Property
  • Currency speculation
  • The purchase of Stocks and Shares
  • Business purposes
  • Accident, Sickness and Unemployment premiums
  • Tax bills