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Lending Criteria


At Chorley Building Society, we’re proud to have a common sense approach to lending - offering an individual manual underwrite with direct access to an underwriter. Which means that throughout the process, we’re able to offer flexibility to support you and your clients. If you want discuss your client’s specific requirements, please give us a call on 01257 235001 (Option 2). Alternatively, you can click here for a look at our lending snapshot, or use the search box below to look at our specific lending criteria.

Criteria Description
Where We LendWe lend in England including the Isle of Wight, Wales including the Isle of Anglesey, the Scottish mainland and the Isles of Argyll and Bute.
Number of ApplicantsThe Society may consider up to four applicants per application.
Non EEA NationalsApplicants with permanent right to reside in the UK who have lived in the UK for the last 3 years may be considered, provided no diplomatic immunity is in place.
TermThe minimum mortgage term is 1 year.
The maximum mortgage term is 40 years.
Age

Minimum Age

Criteria Description
Standard Residential Lending 18 (21 for lending above 90%)
Self and Custom Build Lending 21
Buy to Let Lending 25


Maximum Age

Criteria Description
Maximum Age – Applicant(s) No upper age limit, reviewed on a case by case basis
Maximum Age - Guarantors 75 At Term End
Maximum Assumed Retirement Age 70 unless the customer states lower, or can demonstrate suitable evidence of a later retirement age.


Retirement

Criteria Description
Lending into Retirement Maximum 75% LTV
Lending whilst Retired Maximum 70% LTV
LTV Loan amount
LTV Loan Brackets
>60 - 70% LTV £800,001 to £1,000,000
>70 – 80% LTV £500,001 to £800,000
>80 - 85% LTV £400,001 to £500,000
>85 – 90% £350,001 to £400,000
>90 – 95% LTV Up to £350,000
Debt ConsolidationDebt Consolidation may be considered up to a maximum of 80% LTV.
Capital RaisingCapital Raising may be considered up to a maximum of 80% LTV. The Society will not allow capital raising for the following reasons:

  • Payment of gambling related debts.
  • Debt Consolidation or Capital Raising above 80% LTV.
  • Buy to Let additional borrowing above 80% LTV.
  • Purchase of Stocks and Shares or currency speculation.
  • Capital injection in to a business or consolidation of a business loan unless the business accounts have been assessed to ensure this is not a “distress” application.
  • Income Multiples
    No of Incomes Used Loan to Income Ratio
    For 1 or 2 Incomes Up to 4.49 x Total Income – after ongoing credit commitments have been deducted.
    For 3 or 4 Incomes Up to 3.25 x Total Income – after ongoing credit commitments have been deducted.
    Income Types – Employed
    Income Acceptable Weighting Considered
    Salary 100% x annual gross salary
    Allowances – for example:
  • Car
  • Housing
  • Additional Duties
  • Shift
  • Location
  • 100% if guaranteed
    50% if non-guaranteed and regular
    Bonus 100% if guaranteed (average of last 2 years’)

    50% if non-guaranteed (average of last 2 years’)
    Overtime 100% if guaranteed (average of last 3 months’)

    50% if non-guaranteed(average of last 3 months’)
    Commission only/ majority commission applicants 100% x average commission earned over the last 2 years if guaranteed.

    50% x average commission earned over last 2 years if non-guaranteed.
    Renewable fixed term contracts Accepted only where the applicant can display a continuous history of employment for at least 2 years (can be with different employers)
    Non-renewable fixed term contracts/ temporary contracts/agency contracts Accepted only where the applicant can display a continuous history of employment for at least 2 years (can be with different employers)
    Probationary Periods Can be considered subject to a detailed rationale outlining risks and mitigations.
    Income Types – Self Employed
    Status Income Assessed Required Documentation
    Sole Traders & Partnerships Share of net profit taken over the last 2 years. Full and final (not draft) accounts signed by accountant/accountancy firm* for the latest 2 years

    Or

    HMRC SA302s (or equivalent) and corresponding tax year overviews for the latest 2 years
    Limited Companies Average salary plus dividends taken over the last 2 years. Full and final (not draft) accounts signed by accountant/accountancy firm* for the latest 2 years

    Or

    HMRC SA302s (or equivalent) and corresponding tax year overviews for the latest 2 years
    Limited Liability Partnership (LLP) with 20% of more share Average salary plus dividends taken over the last 2 years. Full and final (not draft) accounts signed by accountant/accountancy firm* for the latest 2 years

    Or

    HMRC SA302s (or equivalent) and corresponding tax year overviews for the latest 2 years
    *Acceptable accountant qualifications: ACA, ACCA, FCA, FCCA, CA (Scottish).

    The Society can consider the use of retained profits and directors loan – ring an underwriter to discuss specific requirements.
    Maternity, Paternity and Adoption Leave If an applicant declares they are taking or will be taking maternity, paternity or adoption leave, the application can be considered subject to appropriate underwriter rationale.

  • Income is taken from before the leave – this can be from last 3 payslips and P60 (if available);
  • Applicant confirms in writing they will return to their job post the period of leave;
  • Reference is gained from employer to confirm they are still employed but on leave;
  • Underwriter has evidence / rationale to confirm the applicants can afford the monthly mortgage payment over the period of leave (this may be funded from savings, or family gift etc.) evidence of this would be required from bank statements and/or savings statements.
  • Gifted DepositsGifted deposits may be acceptable where the individual(s) making the gift have a close relationship with the applicant/s and where:

  • the gift is non-returnable
  • the individual(s) making the gift will have no interest in the mortgaged property
  • GuarantorsGuarantors are acceptable subject to the criteria below but are NOT accepted under the Help to Buy schemes.

    The Society may be asked to consider a guarantor in cases where the applicant’s(s’) income is insufficient to pass the affordability test.

  • Maximum 1 Guarantor
  • Maximum age of Guarantor at term end 75 Years
  • They will have no interest or share in the property.
  • Where the Guarantor is also making a capital contribution to the purchase price or to the monthly mortgage payment it must be confirmed in writing by the guarantor that this is a gift and that the guarantor will have no interest or share in the property.
  • The guarantor should:
  • Be a close relative of the applicant(s) (otherwise Credit Risk Committee approval will be required).
  • Have a clean credit record - with no history of bankruptcy, IVA’s, CCJ’s, defaults or missing payments.
  • Have income from employment, self-employment, pension, or investments
  • Have sufficient disposable income to comfortably maintain mortgage payments to the Society (if called upon) whilst maintaining all current obligations.
  • Be willing to accept responsibility for the whole mortgage debt (and accrued costs) if the borrower defaults.
  • Satisfy the same lending criteria that the Society would apply to a mortgage applicant.
  • Interest Only and Part Interest OnlyInterest only is limited to:

  • Maximum 80% LTV (50% if downsizing is the Repayment Strategy);
  • Minimum borrower equity of £50,000 (£100,000 if downsizing is the Repayment Strategy)
  • Maximum loan of £500,000

    A combination of Part Interest Only & Part Capital and Interest is limited to:

  • Maximum 85% LTV; (with a maximum of 50% LTV on the Interest-only element if downsizing is the Repayment Strategy)
  • Minimum borrower equity of £50,000 (£100,000 if downsizing is the Repayment Strategy)
  • Maximum loan of £500,000 on the interest-only element

    Suitable documentary evidence of a credible repayment strategy must be provided at application stage.

    Repayment Strategies

    The Society accepts a range of repayment strategies for residential ‘interest only’ and ‘part & part’ mortgages. Examples of acceptable repayment strategies are as follows:

  • Endowment Policy.
  • Savings / Investment Plan (Including Premium Bonds).
  • Premium Bonds – can only be used to a maximum of £50,000 per named customer.
  • Pension Plan:
  • Defined Contribution Schemes – 25% of the total fund value can be used.
  • Defined Benefit Schemes – full projected tax free cash sum can be used.
  • Sale of second property -located in the UK only.
  • Sale of a commercial property (inc. Buy to Let).
  • Downsizing (Sale of current property). The minimum level of equity at the time of application, must be greater than £100,000 and the maximum loan to value is 50%. Each case will be assessed for suitability, according to the customer’s individual circumstances.
  • Other repayment strategies may be acceptable subject to Credit Risk Committee approval

    The Society will not accept the following as Repayment Strategies:

  • Anticipated inheritance.
  • Repayment strategies held in a foreign currency e.g. funds held in a bank account/ investment/ pension plan in currency other than sterling or an asset held or valued in a foreign currency e.g. property or business abroad.
  • Moving to rented accommodation at the end of the mortgage term.
  • Moving in with family/friends at the end of the mortgage term.
  • To convert to Capital & Interest at a later date.
  • Bonus income.
  • Adverse Credit HistoryThe Society does not offer impaired credit lending.

    The Society will consider lending where the following apply – this is subject to robust rationale being provided, underwriter and/or credit committee

  • 1 CCJ or default up to a total value of £500 issued and settled within last 3 years.
  • 1 CCJ or default up to a total value of £500 issued within last 3 years, not settled, but will settle before completion.
  • 1 or more CCJ or default exceeding £500 in total, issued over 3 years ago, not settled, but will settle before completion.
  • 1 or more CCJ or default issued and settled over 3 years ago.
  • 1 or more CCJ or default issued over 3 years ago, but settled within the last 3 years.
  • Unauthorised use of overdraft.
  • Use of pay-day loans.
  • Subject to repossession over 3 years ago
  • Subject to debt management plan, entered into more than 3 years ago and has been settled over 3 years ago.
  • Subject to debt management plan, entered into more than 3 years ago and has been settled within the last 3 years.
  • More than 1 CCJ or default up to a total value of £500 issued and settled within the last 3 years.
  • 1 CCJ or default up to a total value of £500 issued within last 3 years but not settled.
  • Subject to debt management plan, entered into more than 3 years ago and being satisfactorily maintained.
  • Arrears on a previous / current mortgage or other secured loan where more than 2 years ago, (but within the last 3 years) reached 3 or more monthly payments overdue.
  • Help to Buy Equity Loan SchemeThe Society may consider applications under the “Help to Buy Equity Loan” scheme subject to the following:

  • Maximum Purchase Price £600,000 in England.
  • Maximum Purchase Price £300,000 in Wales.
  • Maximum Purchase Price £200,000 in Scotland. New build property only.
  • Society to fund a maximum of 75% of the purchase price in England and Wales.
  • Society to fund a maximum of 80% of the purchase price in Scotland.
  • Equity Loan of 20% minimum of the purchase price to be provided by the Help to Buy Agent or equivalent body for Wales.
  • Equity Loan of 15% minimum of the purchase price to be provided by the Scottish Government.
  • Minimum personal/gifted deposit of 5% required.
  • Subject to the Society’s standard affordability criteria including equity loan payment.
  • Part exchange on old home is not acceptable.
  • Maximum remortgage term 25 years.
  • Repayment method must be Capital & Interest.
  • Guarantors not acceptable.
  • Council House “Right to Buy” PurchasesThe 1980 Housing Act contained “Right to Buy” terms and provisions for Council House Tenants. Generally, the Society will grant an advance of up to 100% of the discounted purchase price providing the advance does not exceed 75% of the market valuation.

    If, at the time of purchase, an applicant wishes to borrow additional funds to carry out home improvements taking the advance beyond 100% of the discounted purchase price, this may be acceptable subject to an appropriate retention being made, the valuer confirming the value of the property after the works have been undertaken and the relevant local authority approval being given.

    The product/illustration should be based on the true open market value not the purchase price.

    Concessional PurchaseThe Society will consider concessional purchase/gifted equity transactions between close family members subject to the following criteria:

  • The property is to be used as the main residence by the applicant(s).
  • The individual providing the concession will not reside at the property following completion.
  • Maximum 100% of purchase price and subject to a maximum 80% LTV of open market valuation.

    The product / illustration should be based on the true value LTV not the purchase price.

    The Society will consider concessional purchase/gifted equity transactions between landlord and tenant subject to the following criteria:

  • The property is to be used as the main residence by the applicant(s).
  • The individual providing the concession will not reside at the property.
  • Maximum 100% of purchase price and subject to a maximum 80% LTV of open market valuation.
  • Applicant must have resided at the address for a minimum of 12 months prior to application.
  • The product / illustration should be based on the true value LTV not the purchase price.

    The product/illustration should be based on the true open market value not the purchase price.

  • Buy to Let (BTL)The Society may consider BTL applications for wholly business purposes, where the applicant(s) have purchased/are purchasing a property intending to let it out and neither they nor their relatives have lived there or intend to live there in the future, subject to the following:

  • Maximum LTV 80%.
  • Minimum Value £100k.
  • Minimum advance £80k.
  • Maximum loan £1m.
  • Minimum age 25 years.
  • No maximum age.
  • Minimum term 1 year.
  • Maximum term 40 years.
  • Maximum total loans £1.5m (to any individual or connected counterparties).
  • Maximum number of BTL properties (both mortgaged and unencumbered) within their portfolio is 3.
  • Minimum income £20k sole or £25k joint at the time of application (to be verified as per standard criteria).
  • 25% exposure concentration on any one development (unless in a PR postcode area when a business case can be referred to Credit Risk Committee and Board for approval).
  • Maximum 6 Bedrooms.
  • Assured Shorthold Tenancy only (1 AST per property).
  • Interest coverage ratios (ICRs):
  • If the applicant(s) are basic rate tax payers, rental yield must cover 125% of stress tested mortgage interest payment.
  • If one or more of the applicants are higher rate tax payers, rental yield must cover 135% of the stress tested mortgage interest payment.
  • Applicant(s) can afford the mortgage payment on interest only when stress tested at the higher of pay rate +2.00% or 5.5%.
  • Other income can be considered to support any shortfall in rental yield subject to Credit Risk Committee approval. If this is used an income affordability test must be undertaken.
  • Can be interest only – no need for £50k equity and may use sale of mortgage property as repayment vehicle.
  • 1st time landlords accepted subject to having owned their own home for a minimum of 12 months (do not need to have had a mortgage), been in current employment/self-employment for 12 months, maximum 75% LTV, max loan £500k.

    The Society will not consider applications for Consumer Buy to Let or Houses in Multiple Occupation (HMOs)

  • Property Criteria New Build Properties
    Type Maximum LTV Further Information
    New Build Houses 95% (Subject to product availability) Minimum value £80,000

    If leasehold, must have minimum of 85 years remaining at end of the contractual mortgage term
    New Build Flats/Maisonettes 95% (Subject to product availability) Must be leasehold and have a minimum of 85 years remaining at end of the contractual mortgage term

    Minimum value £80k

    Maximum 20 floors in block

    If the property is on or above the 4th floor, the property must be serviced by a lift

    May be considered over commercial unit provided:

  • High quality and desirable development
  • Commercial units on ground floor only and subject flat not directly over the commercial unit
  • Type of commercial units unlikely to have an adverse impact on re-sale.
  • New Build Studios 95% (Subject to product availability) Must be leasehold and have a minimum of 85 years remaining at end of the contractual mortgage term.

    Minimum advance £80k

    Maximum 20 floors in block

    If the property is on or above the 4th floor, the property must be serviced by a lift

    Minimum 30m2 internal floor space.

    Must have separate food preparation, washing and toilet facilities

    May be considered over commercial unit provided:

  • High quality and desirable development
  • Commercial units on ground floor only and subject flat not directly over the commercial unit
  • Type of commercial units unlikely to have an adverse impact on re-sale
  • Acceptable new build warranty providers are NHBC, Self-Build Zone, Premier Guarantee, LABC and Checkmate.

    Non New Build Properties
    Type Maximum LTV Further Information
    Non-New Build Houses 95% (subject to product availability) Minimum value £50k.

    If leasehold, must have a minimum of 85 years remaining at end of the contractual mortgage term
    Non-New Build Flats/Maisonettes 95% (subject to product availability) Must be leasehold and have a minimum of 85 years remaining at end of the contractual mortgage term

    Minimum value £80k

    Maximum 20 floors in block

    If the property is on or above the 4th floor, the property must be serviced by a lift

    May be considered over commercial unit provided:

  • High quality and desirable development;
  • Commercial units on ground floor only and subject flat not directly over the commercial unit;
  • Type of commercial units unlikely to have an adverse impact on re-sale
  • Non-New Build Studios 95% (subject to product availability) Must be leasehold and have a minimum of 85 years remaining at end of the contractual mortgage term

    Minimum advance £80k

    Maximum 20 floors in block

    If the property is on or above the 4th floor, the property must be serviced by a lift

    Minimum 30m2 internal floor space.

    Must have separate food preparation, washing and toilet facilities

    May be considered over commercial unit provided:

  • High quality and desirable development
  • Commercial units on ground floor only and subject flat not directly over the commercial unit
  • Type of commercial units unlikely to have an adverse impact on re-sale
  • Second Home Loans The Society may consider loans up to a maximum of 85% LTV for weekend homes, commuter homes, homes for dependant relatives etc. provided the property is not to be left unoccupied for more than 30 days at a time.

    Self-Build/Custom Build The Society offers self-build and custom build loans exclusively through Buildstore/Buildloan.

    Flying Freehold Flying Freehold of up to 20% may be considered.

    Builder Gifted Incentives
  • Incentives may be acceptable up to the value of 5% of the purchase price.
  • Incentives are defined as stamp duty, white goods, carpets, and curtains etc. and must not include a discount to the purchase price.
  • No part of the incentive can be used as deposit.

  • Solicitors

    The Society operates a managed panel of Solicitor’s/Licensed Conveyancer’s via Legal Marketing Services Ltd (LMS).

    Applicants have the following options when choosing a Solicitor/Licensed Conveyancer:

  • Instruct an approved Solicitor/Licenced Conveyancer from the Society’s panel or;
  • A ‘non-panel’ Solicitor may be used providing a ‘panel’ Solicitor is also instructed to act on the Society’s behalf.

  • Panel Solicitors/Licenced Conveyancers must meet the following criteria:
    o Have 4 or more partners;
    o Be registered with the Law Society (www.lawsociety.co.uk) or Council of Licensed Conveyancers (www.conveyancer.org.uk);
    o Have minimum professional indemnity insurance cover of £2m.
    o Professional Indemnity Claims - a maximum of 1.5% of all residential conveyancing claims from the last 12 months purchase completions.
    o No Disciplinary Sanctions for partner or residential conveyancing related, fraud or client account related.
    o DPA Breaches below 1% of the last 12 months completions.


  • Need help on any of the following? Speak directly to one of our Underwriters on 01257 235001 (option 2) who will be help to discuss your requirements.

  • IT Contractors
  • CIS Contractors
  • Professional Sportspersons / Entertainers
  • Use of retained profits
  • Section 106/75
  • Ex Local Authority flats
  • Agricultural Restrictions
  • Unusual Construction Types