Standard Criteria for Mortgages
Scottish Building Society will only consider mortgage applications on a ‘fully advised’ basis, with a full assessment of both the applicants’ past credit record, and their ability to meet current and future financial commitments – including their mortgage payments and other related expenditure.
The following criteria are the minimum requirements that must be satisfied for applicants to be eligible for an owner-occupier mortgage. Any lending to applicants outside the standard criteria requires prior approval. We would recommend that any cases out with our standard criteria are discussed in full with your Business Development Manager prior to submission.
Maximum Number of Borrowers on an individual mortgage
|
LTV |
Maximum Number of Borrowers |
Maximum Incomes for Affordability Calculation |
|
<80% |
4 |
3 |
|
>80% |
4 |
2 |
Minimum/Maximum Mortgage Term Age Criteria
- The minimum age of all parties to a mortgage at inception is 18, with the exception of Retirement Interest-Only Mortgages, where the minimum age of all parties to the mortgage is 55, and the Professional Mortgage where the minimum age is 21 for the applicant.
- The maximum age at the end of the mortgage term is normally 85. If the applicant will be in excess of their expected retirement age at the end of term then affordability using retirement income must be proven. Unless confirmed as an earlier date the default age for retirement is age 70.
- There is no maximum age requirement on Retirement Interest-Only Mortgage cases.
- The minimum mortgage term is 5 years and the maximum term is normally set in relation to the borrowers’ expected retirement date, providing the term does not exceed 40 years.
- There is no maximum term applicable to Retirement Interest-Only mortgages.
Income Multiples
All mortgage applications are based on affordability.
- For loans less than 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4.5 x income
Joint applicants: Main income x 4.5 plus second income x 1 OR Joint income x 4 - For loans over 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4 x income
Joint applicants: Main income x 4 plus second income x 1 OR Joint income x 3.75
- For applications > 80% LTV the current income multiples (stated above) may not be exceeded other than for Professional applications
- All mortgage applications received by the Society are assessed using the Society’s Affordability Model.
- Lifestyle issues are assessed by the Mortgage Underwriter by inspecting the applicant’s bank statements, covering the most recent 3-month period.
Mortgage/Rental Payments
- If the conduct of the existing mortgage cannot be verified via bureau data, the following documentary evidence should be obtained:
- Bank or mortgage statements, which largely cover the 12-month period prior to application, or a lender’s reference.
- For first-time buyers where the borrower is living in rented accommodation provided by a housing association or local authority, the following documentary evidence of rental payments should be obtained:
- Bank or rental statements, which largely cover the 12-month period prior to application, or a landlord’s reference.
For minimum and maximum loan amounts and loan to value, please check the relevant product page
Employment Status
- Employed applicants must be in permanent employment and have been employed with their current employer for at least 6 months or, if less than 6 months, have been employed immediately before for a minimum of 12 months.
- Self-employed borrowers (including company directors) must have been conducting their business for a period of at least 2 years and be able to provide evidence of income for that period, together with a projection/estimate of income for the coming 12 months. (Normally SA302 with overview which the customer can obtain from Inland Revenue.)
- Contractors the Society will not lend in excess of 80% LTV where income is derived from a fixed term contract other than for Medical Professionals e.g. doctors in the NHS.
Contractors on a ‘Contracts for Services’ basis will be treated similarly to self-employed applicants in that:
- Engaged in contracts for at least 3 years.
- Income evidenced by last 3 years tax assessments with income to have been level or progressively rising.
- Last 6 months SC60s/715 vouchers to be provided.
Voters Roll/Proof of Occupancy
- Personal status details including inclusion on the Voters Roll will be checked for all parties to the mortgage (including guarantors) at all addresses within the previous three years.
- Appropriate proof of occupancy is required if the borrower does not appear on the current Voters Roll.
- Proof of identity, as required by the current Money Laundering Regulations and the Regulator is also required.