Accounts
For loans of up to £100,000, accounts provided by a bookkeeper will be accepted.
Additional Borrowing
When applying for Additional Borrowing the product chosen must be from the same scheme as the main borrowing; the minimum additional borrowing is £5,000. A flexible product cannot be combined with any other product type.
The maximum LTV on Additional Borrowing applications is 80%.
Additional borrowing applications will not be permitted within 6 months of completion of the original mortgage.
Where existing customers are moving home and porting their current product / rate the maximum LTV is 85%.
Additions to loan
The items that can be added on to the loan amount are higher lending charge (where payable) and product fee. The maximum amount of add-ons as a percentage of purchase price or valuation (whichever is lower) must not be more than 4%.
Adverse Credit
The allowable adverse credit limits are listed below.
CCJs / Defaults
Ignore all mail order defaults up to £100
1 satisfied CCJ/Default up to £250 in last 2 years
2 satisfied CCJs/Defaults up to £500 in last 2 to 6 years
Mortgage/Rent Arrears
1 month in last year
2 months in the last 3 years
Other Non-Mortgage Arrears
3 months arrears in last year
Arrears occurring greater than 1 year ago ignored
Repossession
Not allowed
Bankruptcy
Discharged more than 6 years ago
IVAs
Satisfied more than 6 years ago
Affordability
The customer’s maximum borrowing is calculated using our affordability model. This takes into consideration the financial commitments of the customer and also their household expenditure.
Applicants
Minimum age: 18 years.
Maximum age: 65 years at the end of the mortgage term.
Assignable Contracts
Applications which involve assignable contracts or irrevocable powers of attorney in favour of intervening sellers are not acceptable. Any other structure to the transaction which has a similar effect should be reported to us. Assignable contracts allow the original buyer to sell the property before legal completion, by assigning the contract to buy the property to a new buyer after contracts have been exchanged with the developer.
Builder Cash Incentives
These include but are not limited to deposit contributions, cash-backs, contributions to legal fees/stamp duty, mortgage subsidies.
Builder Cash Incentives will typically be acceptable provided the value of these does not exceed 5% of the lower of purchase price/valuation. Cash incentives in excess of this amount may result in a reduction in the maximum loan available.
All Builder Cash Incentives must be declared at point of sale.
Conveyancers
In order to act jointly for both the customer and Birmingham Midshires, or to act solely for Birmingham Midshires, a conveyancer must be on the Lloyds Banking Group panel of conveyancers. If the loan is for a house purchase and exceeds £1 million we will require separate legal representation and will appoint our own conveyancer. This provides a higher level of security for both us and our customer where we are making large mortgage advances.
There are three firms of solicitors who have been appointed to act for the Bank in these transactions and the appropriate solicitor will be appointed based on property location:
- The customer will still provide details of their own solicitor.
- The customer should be made aware that their solicitor will be contacted directly by our solicitor at offer stage and all documentation will be dealt with by them e.g. Mortgage Loan Agreement, advance of funds at completion.
Definition of income
100% of basic salary, cost of living allowance, housing or rent allowance, service/state pensions and car allowance.
We also consider up to 60% of regular or non-guaranteed overtime, mortgage subsidy, bonus and commission. Exclusions - travel allowance and expenses.
Deposits
The deposit for any purchase should come from the applicant(s) own resources. Where there is a purchase at undervalue, the maximum loan will be based on the discounted purchase price. The valuer must be aware of any incentive and refer to this in the valuation report.
Any deposit coming from a directors loan account is not acceptable
Distressed Sales
Applications which involve a distressed sale are not acceptable.
Documentation required
All first time buyers:
- 3 months’ bank statements
If employed:
- Latest 3 payslips or latest payslip plus P60 or latest payslip plus 3 months’ bank statements
If self-employed:
- Latest 2 years’ accounts or 2 years’ Inland Revenue Self-assessments
All existing mortgage holders/local authority tenants:
- Latest lender’s or landlord’s statement.
Each case is considered on an individual basis. We may request additional information where considered appropriate and relevant to the lending decision.
Exposure limits
We would not normally allow exposure on any development to exceed 30% across the following brands: Birmingham Midshires, Bank of Scotland, Halifax, TMB and Intelligent Finance - the limit (which may be less than 30%) will be dependent on size, nature, local market conditions and status of the development.
Finder's Fees
Applications involving Finder’s Fees are not acceptable. A Finder’s Fee is a fee or commission paid by a seller to a third party (such as an investment club) for finding or introducing a buyer. It does not include the normal fee or commission payable to any estate agent handling the sale.
Higher Lending Charge
If your loan is for 90.01% or more of the purchase price or valuation, a one-off risk associated fee will be charged that can normally be added to your loan. Additional mortgage security for loans of 90.01% or more is charged at 8.50% of the amount borrowed above 75%. If your property is ever taken into possession and sold for less than the amount you owe (including arrears, interest and costs), then it remains your responsibility to pay any shortfall. No Higher Lending Charge on loans of less than 90% loan to value.
Household insurance
Property will only form an acceptable security if insurance cover, under normal terms including subsidence and flood cover is confirmed.
Interest
Interest is calculated on a daily basis.
Life cover
Applicant to satisfy themselves that they have made proper provision for cover.
Policies will not be assigned.
LTV/Loan Size
85% £25,001 to £1.7million.
75% £1.7million+.
Minimum loan - £25,001.
Maximum loan - £2million
The maximum LTV for new build properties including newly converted (within 12 months of application) and previously occupied properties is 80%.
This includes Additional Borrowing applications where the main loan completed within the last 12 months.
If the individual loan amount or total borrowing exceeds £500,000 the application will be subject to a full underwriter review which may lead to additional information being requested.
Minimum employment period
Employed applicants will be expected to have been employed for a minimum of 6 months in their current job.
Self-employed applicants will be expected to have been employed for a minimum of 2 years in their current job.
Each case is considered on an individual basis. We may request additional information where considered appropriate and relevant to the lending decision.
Monthly payments
All payments must be made in sterling by direct debit through the UK direct debit system. The direct debit must be in place prior to completion.
New Build
A New Build property is classed as any property being occupied and/or sold for the first time on the open market in its current state.
This includes brand new property, refurbished property (re-developed existing residential property) or converted property (re-developed non-residential property).
All lending decisions are based on valuation or purchase price (whichever is lower).
Portability
All products are portable which means that the applicant can keep the same rate and term of their chosen mortgage if they move during the product period. If either the scheme or their circumstances change they may not be able to keep this product and any early repayment charges will be payable.
Proof of residence
If the applicant(s) is/are not on the voter’s roll at the current address, proof of residence must be provided: e.g. bank/building society statement credit card statement, or Council Tax statement.
Repayment methods
Repayment, interest only or combination. The method(s) for repaying interest only element must be specified
Security
Minimum acceptable property value or purchase price (whichever is the lower) is £40,000.
Right to Buy/Shared ownership applications are not acceptable.
First mortgage on freehold properties in England, Wales and Northern Ireland, properties in Scotland or leasehold properties in England, Wales and Northern Ireland with at least 70 years unexpired term at the time of application.
Freehold flats/maisonettes are unacceptable. Residential security only.
We require that a newly built property (or one being occupied for the first time) has the benefit of building standards indemnity insurance, for example a 10 year warranty from the National House Building Council or Zurich Municipal Insurance. (For other acceptable Indemnity Insurance providers - please refer).The only exception to such indemnity insurance cover is where an architect or qualified surveyor is employed by the applicant to supervise the building of the property (Certain other qualified consultants may be acceptable - please refer).
Sub-Sales and Back to Back Transactions
Sub-sales and back to back transactions are not acceptable. A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. A back to back transaction is a type of sub-sale where the intervening seller buys from the original seller and sells on to the borrower on the same day or within a few days. We also regard as sub-sales cases where the seller acquires the freehold (or superior leasehold) title to the property, which they then immediately sell on to the borrower by the grant to them of a lease (or sub-lease).
Term
5-40 years.