Criteria

The Society no longer assesses your borrowing capacity through income multiples and has developed a new Affordability Calculator which is now more tailored to borrowers individual circumstances. Assessment of how much you can borrow is now calculated through a combination of your income, regular commitments and household / lifestyle expenditure.

In assessing affordability all unsecured loans that have more than 6 months to run, credit cards and maintenance will be deducted. In addition, deductions will also be made for declared household and lifestyle expenditure which is compared against statistical data for accuracy.

If you have any questions regarding the use of the calculator please check our frequently asked questions section or alternatively contact our Intermediary Services Support team on 0845 602 2338.

Minimum age for applicants is 18. In addition, our maximum age at the end of the loan term is 75. Where applicants are approaching retirement age (normally within 5 years) then sufficient pension income to support the advance throughout the mortgage term is required.

For those applicants who already have 1 or more investment mortgages we will agree up to 95% on the basis that we receive:

• Evidence that the mortgage conduct on all investment mortgages is satisfactory with no missed payments. Sight of conduct via credit bureau data is acceptable.
• Sight of existing Assured Shorthold Tenancy agreement (or Scottish equivalent) is required for all investment mortgages. The rental income received must cover the current mortgage payment by at least 110% to cover rental voids, management /maintenance costs associated.
• Where the tenancy agreement provided has expired then we will require proof that it has been renewed.
• Where applicants have a significant investment portfolio (greater than 5) then we would also expect to have sight of their BTL portfolio summary.
• It must be clearly established that the investment portfolio is fully self supporting.
• In all instances the application should be referred to an Underwriter for approval.

• Contract workers are considered higher risk to the Society due to affordability concerns once a set contract period has ended. For this reason we would be looking for a track record of employment within the same sector for at least 2 years. This can be evidenced via P60's.
• Applicants who have fixed term contracts within professional occupations such as doctors, teachers and solicitors, will be regarded as in permanent employment. Applicants from contract workers in other fields will be considered on their individual merits.
• We require sight of current contract confirming income and duration. For applicants employed on contracts of 12 months or more we would expect there to be at least 6 months to run at the time of application. For those on shorter term contracts then we would expect there to be at least 3 months remaining.
• Written confirmation from the employer must be sought that applicant's contract will be renewed beyond the current expiry date or we have evidence that another contract has been signed with another company.
• Applicants employed through recruitment agencies will not be accepted unless a 2 year track record can be established.
• IT contractors can be considered as long as a track record within the Industry can be established. This may be evidenced via previous contracts in conjunction with P60's or SA302’s if self employed. If the applicant is employed via an umbrella company we will take the gross income as sighted via contract and payslips.

We will run a credit search on all our applicants' addresses to cover the three year period preceding the application. The results should confirm the applicants are registered at the address and that:

• No unsatisfied CCJs or Defaults.
• No CCJ’s or Defaults registered or satisfied within last 3 years
• No bankruptcy or IVA's, irrespective of being satisfied
• Current arrears and instances where 3 or more consecutive payments missed in the last 3 years will be referred to underwriters for assessment;
• No Mortgage arrears within last 12 months (instances where there are, will be referred to underwriters for assessment);

Applicants who have previously had a property repossessed will not be accepted. In addition, applicants who have previously been made bankrupt or subject to an IVA will not be considered.

To assess if a Decision In Principle (DIP) is required before submitting your clients application please refer to the DIP Criteria Form.

If you have answered YES to all of the criteria questions then you DO NOT need to complete a DIP, simply complete the application form and return it along with the relevant documentation.

If you have answered NO to any of the criteria questions then please download and complete a DIP Form and email it to intermediarylending@newcastle.co.uk. Please note a full credit search will be completed for each DIP submitted and will require your client(s) consent.

If you have any queries regarding DIPs please contact us on 0845 602 2338.

• Where it has been established that the property is to be purchased at a discounted price then we can consider lending 100% of the purchase price subject to valuation confirming that LTV based on open market value would not exceed 95%.
• Additional borrowing above the discounted purchase price can only be considered subject to funds being for home improvements only and LTV not to exceed 95% of open market value.
• The acting solicitor must ensure that defective title indemnity insurance is arranged where a discounted purchase price is taking place. This protects the Society from future claims under the Insolvency Act.
• The current occupant of the property would be expected to move out of the property. We will not accept a sitting tenant and the property must be vacant on completion with no charges /restrictions from previous owner remaining.

• The maximum LTV for Non-EEA Applicants is 75% but we will consider applications above this on referral to our underwriters via a Decision In Principle
• All Non-EEA nationals must be able to demonstrate that they have indefinite leave to remain in the UK. Alternatively, professional applications on long term visas may also be considered where there are at least 2 years remaining.
• Evidence of the applicants indefinite right to remain can only be verified by either a residency entitlement stamp on passport and / or visa, or by written confirmation from Home Office/UK Border Agency

• All Guarantor applications must have been referred to underwriters for pre-approval via decision in principle process. Maximum LTV is 95%.
• There must be direct relationship between the applicant(s) and the guarantor(s) i.e. close family relative (parent, child, grandparent). We will also consider applicants where for taxation purposes, a spouse acts as guarantor as opposed to mortgagor.
• Applicants should generally be able to demonstrate that they can afford mortgage payments, with the guarantee required as they are only slightly outside policy. This would typically be a young professional whom it can be expected will have significant increase in earnings once qualified.
• We will consider applications where both the applicant and guarantor are required to support the mortgage for affordability purposes. This is on the basis that the applicant can support at least 50% of the mortgage required with the guarantor supporting the remainder.
• Guarantors are expected to take independent legal advice to ensure they are fully aware of their legal commitments. They will be liable for the entire debt in a default situation.
• Maximum age at application for the Guarantor is 60 years.

The following information is required in support of a mortgage application:

• In the event that the applicants are not registered on the electoral roll, they must supply proof of residence. Any utility bill, council tax bill, voters roll enquiries, bank statements or mortgage statements are acceptable, provided the original documents are supplied and they are from within the last 3 months.
• The Society will be required to confirm identity. Acceptable documents include a passport or driving licence photocard or a recent bank statement (internet copies not acceptable).
• Intermediaries are responsible for ensuring that applicants identity and Proof of Residency are verified as part of the application process.
• Applicants must normally have been resident in the United Kingdom for a minimum period of three years. This can be waived for members of the diplomatic corps, a member of HM Forces, or employees of internationally based companies, providing their family will be resident in the property.
• All Applicants (EEA & Non-EEA) who have not resided in the UK for at least 3 years will need to be referred to an underwriter for assessment.
• Non-EEA nationals will be restricted to 75% LTV and will require evidence of indefinite leave to remain in the UK.

We will accept 100% of:

• Basic income
• Service/state/private pensions and annuities
• Maintenance Order (CSA / Court Order enforceable)
• Car allowance
• Pay rise pending (must be within 3 months and employer to confirm)
• Mortgage subsidy (must be permanent)
• Housing allowance
• Additional investment income from rental portfolio (evidenced by accounts / tax assessment / accountants reference)
• London / Large City allowance

We will accept 50% of:

• 2nd job with 12 months service
• Working family tax credit / Family tax credit
• Overtime / bonus / commission / shift allowance
  (2 years P60's will be required to evidence track record)

We will not consider:

• Unemployment benefit / income support
• Child benefit
• Social security payments that are not guaranteed for life (DLA etc)
• Seasonal work
• One off payments
• Gratuities not sighted on payslips
• Bursaries and scholarships

For all forms of additional income which is being taken into account, documentary evidence will be required.

Lending into retirement can be considered under 2 separate scenarios; those applicants whose mortgage term will take them beyond normal or anticipated retirement age and those who are already retired. As such, they need to be dealt with separately.

Where applicants are approaching retirement:

• Where the applicant(s) are within 5 years of normal or expected retirement at application, then we must base affordability solely on retirement income. It will be a mandatory requirement that we are provided with documentary evidence of post retirement income.
• The maximum mortgage term will be based on the oldest applicant turning 75. Therefore, if the oldest applicant is 60 at the time of application then the maximum loan term would be 15 years.

Where Applicants are currently retired:

• Affordability will be assessed solely on post retirement income.
• Interest only is an acceptable method of repayment subject to normal criteria (max LTV 75%).
• The maximum mortgage term will be based on the oldest applicant turning 75. Therefore, if the oldest applicant is 65 at the time of application then the maximum loan term would be 10 years.

Let to Buy is where the borrower is not redeeming the mortgage held on their existing property and is looking to let this out whilst purchasing a new property as their main residence

We will consider loans above 75% LTV on referral to an underwriter via DIP.

Loans will be considered on the following basis:

• We obtain consent to let from the existing lender or new BTL offer
• We obtain evidence from 1 registered ARLA / NLA letting agent of expected rental income
• The expected rental income passes the NBS rental stress test. This is 110% of the mortgage payment set at 5% fixed on an interest only basis

• Minimum/maximum loan amounts are product specific.
• Minimum mortgage advance is £10,000 (or £1,000 for further advances), maximum advance is £1m. Loans over £350,000 will require Executive approval and must be submitted initially as a Decision in Principle

The Society makes mortgage finance available for:

• The purchase of residential properties for owner occupation, including the purchase of residential properties for a family member to reside in. Normal criteria caps lending at 95% loan to value inclusive of fees.

Remortgages:

• 95% maximum LTV. Can borrow more than owe current lender, subject to the following rules:
  • Home improvements - estimates not required up to 80% LTV. Over 80% LTV - the requirement for estimates is at the discretion of the underwriter.
  • Remortgage fees can be added to the loan if the final LTV does not exceed 95%, product terms permitting.
  • Capital raising is not allowed for business use, currency speculation or to repay gambling debts. The maximum LTV is 80% for all applicants.

Minimum repayment term is 5 years (or 3 years for further advances) with a maximum loan term of 35 years.

Please refer to specific product details for maximum LTV

• Max LTV's are product specific and may vary from time to time.
• Remortgages for capital raising purposes are not permitted on a mortgage above 80% loan to value. Capital raising is described as anything other than the replacement of a home purchase loan or a loan for the purposes of home improvement.

Maximum number of applicants is 4 although we will only assess income from the 2 highest earning.

The Society only pays procuration fees for new applications. It does not pay fees for further transactions with existing customers including further advances; porting to a new property; or product switches.

Fees are paid to the Club, Network or Principal within 28 days of completion of the advance.

• All properties must have a minimum purchase price or valuation (whichever is lower) of £40,000
• The Society will make advances on any acceptable security in England, Scotland, Wales, and Northern Ireland.
• Properties in Scotland still require a transcript of existing report from the applicant on the proviso that the valuer is on our panel and the transcript is completed on NBS papers. Alternatively, we will instruct our panel valuers.
• The tenure of acceptable properties will be freehold or leasehold in England, Wales, and Northern Ireland, or their Scottish equivalent.
• All properties must be assessed by a suitably qualified valuer with sufficient professional indemnity cover. All valuation instructions (with exception of Scotland) will be made by the Society via our nominated panel. Third party instructions are not acceptable.
• We will consider New Build properties up to 80% LTV. There will be no allowance for incentives, LTV will be calculated solely on the purchase price as detailed in the Certificate of Title and the CML disclosures form.

We accept repayment, interest only or a combination of both as suitable vehicles to repay the mortgage. Where loans are arranged on an interest only basis the max LTV is 75% with any remaining borrowing on repayment. We will request details of the applicants repayment strategy and this must be reasonable and adequate to cover the loan.

• Acceptable methods of repaying debt at the end of the mortgage term continue to be ISA’s, PEP’s, sale of business, bonus repayments and lump sum pension payments.
• In addition, we will also consider sale of current property as an acceptable means of repaying the debt at the end of the mortgage term where:
• The maximum overall LTV is 50%
• There is at least £125,000 equity in the property at the start of the loan
• For example, where the property to be purchased is valued at £250,000 then the maximum loan we could consider is £125,000

Arrangement by Estate or inheritance are not classed as acceptable means.

Second homes / holiday homes must be strictly for the sole use of the borrower and dependent family members and must not be let. The maximum loan to value for such properties is 75% and the applicants financial status must be sufficient to cover both loans where we will deduct the applicants main mortgage as a monthly commitment.

• The deposit must come from the applicants' own resources. Gifted deposits from parents and other relatives will be allowed subject to there being no repayment vehicle in force and the underwriter being happy with the arrangement.
• Where the source of the deposit is confirmed as ‘savings' the Society reserves the right to see documentary evidence of the deposit prior to completion.
• If an applicant takes a Policy Loan this is also acceptable as the applicant has provided evidence of an ability to save by paying monthly premiums to the policy.

• "Flying-freehold" - if more than 25% of property involved.
• Houses with rooms let or likely to be let to several tenants where premises have not been converted or constructed for this purpose.
• Properties where the unexpired lease, less the term of the proposed mortgage, have a residue of less than 35 years.
• Unmodernised flats and flats which are above commercial premises. Exceptions can be made for exclusive developments and certain areas of larger British cities where the valuer has confirmed that there is a ready and sustainable demand.
• Large old unmodernised houses where accommodation is in excess of the applicant's requirements, particularly where there are attics and/or basements.
• Back to back houses.
• Council houses built in a non-traditional way, i.e. prefabricated reinforced concrete.
• Ex Local Authority flats where LTV will exceed 50%
• Freehold flats with the exception of ‘Tyneside Flat' style or where the application will own a share of the freehold with a management company in place to oversee the maintenance of the building.
• All flats over 4 storey and greater than 20 flats (Other ex-council flats are restricted to 50% LTV maximum, except in Scotland).
• Houses with restrictions to ownership (e.g. retirement flats, restrictions on occupation to local inhabitants). This list is not exhaustive and any application where there is a restriction should be referred to an underwriter.
• Houses under shared ownership / equity where a sales restriction / charge will remain on the property despite the borrower owning a 100% share. In addition, we will not consider any application where the borrower is looking to remortgage to the Society and capital raise to purchase an increased share in the property
• Mobile homes or caravans.
• Houseboats.
• Uninsurable properties e.g. due to flood risk.
• Self-Build properties.
• Uninhabitable properties (e.g. no kitchen/bathroom/roof/mains services not connected).

Alternative or additional fees may be charged for special schemes, please refer to specific product pages for details.

* All of the above fees include an administration fee to the Society of £125.00.