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Lending Criteria for Family First Guarantor Mortgages

A summary of the Society's current Family First Guarantor Mortgage lending terms is given below.

Any specific requirements for particular mortgage products will be given in the relevant product details sheet. This can be displayed by selecting Family First Guarantor Mortgage from the left hand menu.

summary of family first guarantor mortgage lending terms

Broadly, our approach is to assess the maximum loan amount available under our standard lending criteria by taking your income less any unsecured outgoings and multiplying this amount by an applicable income multiple (see Income Multiples below).

Where you are seeking a loan which is more than our standard maximum loan to value of 75% the guarantor's main residence must have sufficient equity to cover the excess. In these circumstances the Society takes a charge over the guarantor's main residence to provide additional security. The total of the secured borrowing due to all lenders across both properties, inclusive of the guarantee, must not exceed 75% of the total value of the two properties.

It should be remembered that, in the event that you default, the guarantor is liable for the full monthly mortgage payments due and this liability may be secured on the guarantor's main residence (see Guarantor's liability and legal advice below).

purpose of borrowing

Purchase of property plus additional borrowing for any purpose considered.

applicants

Maximum of 4 borrowers and 2 guarantors (parents or grandparents) - all parties must be aged 18 or over.

Where applicable, we will accept one property as the additional security for the mortgage. If the Guarantors property is jointly owned then both owners must be guarantors.

identification of borrower and guarantor

We will require satisfactory proof of identity and verification of current UK address for both you and the guarantor(s).

income verification for borrower

Satisfactory proof of identity, residence and clear credit register enquiry. Lender, landlord, bank and current and/or previous employment references may be required, as applicable.

If you are employed, confirmed annual salary plus half of regular overtime/bonuses accepted. Most recent original P60 and last three months original payslips required.

If you are self employed or employed and have more than a 33% financial stake in a business, net profit for the most recent year accepted. Most recent original HM Revenue & Customs Self Assessment Return is required along with confirmation from HM Revenue & Customs that the figures declared have been accepted without correction (HM Revenue & Customs form SA310 - original needed). Accountant's reference may be required under some circumstances.

If you are retired, annual pension income accepted. Latest original pension statement, latest original P60 or original bank statements required.

income multiples

If you are employed confirmed annual salary plus half of regular bonuses/overtime accepted. If you are self employed, net profit accepted or if you are retired, annual pension income accepted. We may also accept some types of benefits and investment income depending on circumstances. However where income is totally reliant on benefits this will not be considered.  Any other financial commitments will be deducted from the gross annual income, net profit or pension income.

For income multiples please click here.

impaired credit

If you have an impaired credit history we may consider this on an individual basis. Please call our Customer Centre on 01372 747771 to discuss.

maximum loan to value

Maximum loan without additional security on the guarantor's property is 75% of the purchase price or property value (whichever is lower), subject to confirmation of status and satisfactory credit history. 

Maximum loan with additional security on the guarantor's property is 95% of the purchase price or property value (whichever is lower). Confirmation from the lender of the guarantor's current outstanding mortgage balance will be required.

You must be able to provide a minimum of 5% deposit from your own resources or, in the case of a remortgage, from existing equity.

minimum / maximum loan amount

Please refer to our current product summary.

mortgage term

Minimum: 5 years
Maximum: 40 years

Where the mortgage term extends beyond your retirement age you will be asked to explain how the loan will continue to be affordable in retirement. 

properties

Your property and, if additional security is required, the guarantor's main residence must be of standard construction, located in England or Wales, and be either freehold or leasehold subject to a minimum of 70 years unexpired on any lease at outset.

Where applicable, we will only accept one property as the additional security for the mortgage. If the guarantor's property is jointly owned then both owners must be guarantors.

Where the property is a flat, we will require that a suitable lease is in place. We will not normally accept a flat for a mortgage when it is:

• A new build
• Above a commercial premises
• Ex-local authority/Housing Association
• Above four storeys high 
• Studio flat
• Freehold

For other queries for standard or non-standard construction, or if you are not sure whether we will consider the type or property in question, please contact our Customer Centre on 01372 744 155 or email customer centre

minimum property value

The minimum acceptable purchase price or property value (whichever is the lower) is £125,000. This will apply to your property and, if additional security is required, the guarantor's main residence.

processing charge

The processing charge includes the cost of the valuation for mortgage purposes and a £125 administration fee. The processing charge is payable on application and is non-refundable.

Your property value:

£125,000 - £200,000 - £330
£200,001 - £300,000 - £380
£300,001 - £400,000 - £430
£400,001 - £500,000 - £485
£500,001 - £600,000 - £560
£600,001 - £700,000 - £635
£700,001 - £800,000 - £740
£800,001 - £900,000 - £845
£900,001 - £1,000,000 - £950
£1,000,001 - £1,250,000 - £1,100
£1,250,001 - £1,500,000 - £1,250
£1,500,001 - £1,750,000 - £1,400
£1,750,001 - £2,000,000 - £1,560
£2,000,001 - £2,500,000 - £1,720
£2,500,001 - £3,000,000 - £1,880
Over £3,000,000 quoted on request.

Homebuyers or Full Structural reports are available on request for which the cost will be individually advised.

In addition, if the guarantor's main residence is to be used to provide additional security a valuation will be required for which an additional fee of £75 is charged. This fee is payable on application and is non-refundable.

Guarantor's liability and legal advice

The guarantor will also be liable for all of the payments due under the Mortgage, though will not be expected to make payments unless you default on the Mortgage. Where the guarantor is providing additional security the charge taken over the guarantor's property will be for an unlimited amount, reflecting the guarantor's liability for the whole of your mortgage.

Therefore, prior to completion of the mortgage the guarantor will be required to obtain comprehensive independent legal advice regarding the impact of being a guarantor in this mortgage contract. This may be from a Solicitor or Licensed Conveyancer from the same firm as the firm acting in the loan completion, but not the same person acting on your behalf. The guarantor is responsible for the fees incurred.

Where additional security is to be taken, you will be responsible for the additional costs incurred arising from the registration of the Legal Charge to be secured on the guarantor's property, and should seek details of these additional costs from the legal representative.

life cover and income protection

There is no requirement to purchase life assurance or other protection products. However it would be in your interest to review your financial planning when taking out a new mortgage to ensure that you have adequate protection against the impact of involuntary unemployment, accident or ill-health.

Security will be required for the loan.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE