Standard Lending Criteria
Residential Criteria
Location
Available in England, Wales and Scotland for Residential.
Loan Term
Minimum 5 years, maximum 40 years. (Product restrictions can apply)
Loan to Value (LTV)
Purchase / Home Improvement / Equity Purchase to a maximum of 85% LTV (90% for Scarborough Building Society members). Capital raising to a maximum of 85% LTV for allowable purposes (90% for Scarborough Building Society members).
The Loan to Value (LTV) is based on the lower of purchase price or valuation. Right to Buys and genuine inter-family sales can be approved with the lending based on the valuation figure. Builders or Vendors deposits are acceptable subject to the applicant providing 5% deposit from their own resources. New builds restricted to 70% LTV (houses only).
Maximum Loan to Values
| Maximum Loan Amount | Maximum LTV |
|---|---|
| £350,000 | 90%* |
| £400,000 | 85% |
| £500,000 | 80% |
| £750,000 | 70% |
| *Scarborough Building Society members only | |
Higher Lending Charge
If the money we advance is over 80% of the purchase price or the value of the property (whichever is the lower) a fee will be payable. This is paid by the Society.
Remortgage
The property must have been owned by the customer for at least 6 months before they can make an application to us for a remortgage.
Right to Buy
For purchases, amount borrowed can be up to 100% of purchase price or 85% of the property value (90% for Scarborough Building Society members). For home improvements up to 85% of value (90% for Scarborough Building Society members). No local authority flats or maisonettes are allowed.
Status
Proof of identity and residency required for all cases. Applicants must have resided in the UK for a minimum of 12 months prior to application, and have the legal right to reside on a permanent basis.
Excluded Applicants
Lending will not be considered to applicants with declared criminal convictions for fraud, theft, dishonesty, drug trafficking, GBH etc, or Foreign Diplomats/Embassy staff with diplomatic immunity.
Number/Age of Applicants
Minimum 1 applicant with a maximum of 4. Minimum age 18 Maximum age of 80 at the end of the mortgage term.
Income Multiples
- 4.25 x 1 or 4.25 x 1 + second or 3.50 times joint income to 80%.
- 4.0 x 1 or 4.0 x 1 + second or 3.25 times joint income to 85% (90% for Scarborough Building Society members).
Income can include up to 100% of Guaranteed overtime, allowances etc; up to 75% of Regular Commission (two year record); and up to 50% of non guaranteed overtime, commission, and rental income (if not supporting an existing loan).
N.B. If Self-Employed we would normally take latest net profit if profits have been increasing, average net profit over past 2 years if fluctuating, and lowest net profit with explanation if reducing. If Contract Worker, or if Guarantor required, please telephone to discuss.
Financial Commitments
Commitments with over one year to run – annual payment deducted from relevant salary before multiples applied.
Commitments with 6 – 12 months to run – remaining total payment due deducted from relevant salary before multiples applied.
Commitments with less than 6 months to run – usually ignored.
Credit Cards - where total debts on credit cards exceeds £1,000 we will deduct 3% of the balance x 12 from income before applying the multiplier.
Self Employed
A minimum of 2 years signed accounts are required. If the accounts are not signed and the LTV is below 80%, an Accountants Certificate is acceptable. Where an Accountant is not suitably qualified or if the applicant supplies Self Assessment forms to the Inland Revenue, the last 2 years Tax Assessments are required.
Credit History
CCJ’s – Up to 1 CCJ, Max £250, Registered 2 years prior to application and satisfied 6 months prior to application
Arrears – Maximum of 1 month’s arrears in last 12 months, but none in last 6 months.
No Bankrupts or Discharged Bankrupts. IVA considered by exception.
Defaults - Any default registered 2 years prior to application (1 year if 80% LTV or below) can be ignored, providing it does not exceed £250 and it has been repaid in full.
Previous Repossessions - Applicants who have had properties repossessed will not be considered.
Acceptable Tenure
Freehold or Commonhold houses. Feudal Scotland only. Leasehold houses, flats and maisonettes with not less than 35 years remaining on the lease after the term of mortgage. Freehold flats in Scarborough, Whitby, Bridlington and Filey only.
Construction
Properties of non-standard construction (e.g. concrete, steel frame) will not generally be considered.
Restricted Property
Scarborough Building Society will lend on the following properties subject to the restrictions below:
- Converted and purpose built flats and maisonettes in blocks of 6 storeys or less.
- All newly built housesˆ to a maximum LTV of 70%.
Unacceptable Properties
The following property types are deemed unacceptable:
- Newly built/convertedˆ flats
- Properties of non standard construction including 100% timber, concrete, steel framed, flat roofed or asbestos tiled.
- Properties designated as defective under the Housing Defects Act 1984 and Housing Act 1985 or containing Mundic Block materials.
- Ex-Local Authority flats and maisonettes.
- High rise flats (above 6 storeys), flats above commercial premises, freehold flats or maisonettes or studio flats.
- Properties with agricultural restrictions, other restrictions on the title, or situated on
contaminated land. - Properties determined as unacceptable security or uninhabitable.
- Less than 10 years old without either an NHBC Certificate, Premier Guarantee, Architects / Chartered Building Surveyors Certificate or Zurich Municipal Building Guarantees.
- Properties not wholly owned by the borrower. For example Shared Ownership.
- Multi-unit properties, commercial properties, mobile homes and house boats.
- Properties with ongoing structural movement or properties previously underpinned with no underpinning guarantee.
- Uninsured properties or those subject to an ongoing insurance claim.
- Minimum property valuation £50,000 and £75,000 in London.
- Properties in holiday parks.
ˆA new build property is defined as a newly constructed or converted flat or house which has not previously been occupied or which has been built or converted since 1 January 2006.
Buy To Let Criteria
Status
Not available to first-time buyers.
Location
Available in England and Wales for Buy to Let. Holiday Lets only available in recognised Holiday Letting areas. Please Note: We do not lend on Buy to Let properties in Scotland.
Rental Assessment
Standard Buy to Let – Loan x Charge Rate x 125% divided by 12.
Holiday Buy to Let- Loan x charge rate x 150% divided by 12.
Maximum Loan to Value
Maximum of 65% for Standard BTL and Holiday Let.
Maximum Loan Size
We will consider a maximum individual loan of £500,000.
Portfolio
Maximum of 1 BTL property with the Society.
Tenancy Agreements
Properties may only be let on an Assured Shorthold Tenancy (AST) basis (unless Holiday Let). Where we agree a mortgage when the property is already let or occupied before completion of our mortgage, all adult occupiers of the property must have a letting on an AST basis.
For Holiday Lets, proof of rent is required by way of confirmation from a recognised & reputable holiday letting company.
In all cases Student tenants, DSS tenants, multiple occupants and company lets will not be allowed.
Restrictions
We will only consider lending on flats that are purpose built.
For Holiday Lets we will consider properties with an occupancy restriction provided this restriction allows the purchaser to live in the property for at least 11 months of the year. We will not lend if the property can only be used as a Holiday Let or if, for example, it is only able to be sold to 'local residents'. The property must be of standard construction and we will not normally lend if the property is in a holiday park.
Minimum Income/Affordability
The minimum employment income for holiday lets, buy to lets is £25,000 per annum.
Credit History
CCJ’s – Up to 1 CCJ, Max £250, Registered 2 years prior to application and satisfied 6 months prior to application.
Arrears – No arrears in last 12 months.
No Discharged Bankrupts or IVA.
Defaults - Any default registered 1 year prior to application can be ignored, providing it does not exceed £250 and it has been repaid in full.
Previous Repossessions - Applicants who have had properties repossessed will not be considered.