Underwriting and
Packaging Guide
Effective date: 20
th
May 2015
(2115 Product Range)
THIS GUIDE IS TECHNICAL INFORMATION FOR INTERMEDIARY USE ONLY.
It is not intended to constitute a financial promotion under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and must not be shown or handed out to customers. Not for display.
Underwriting and Packaging Guide
Contents
Packaging Guide [Document Purpose] ...6
Applicability ...6
Plausibility & Reasonableness ...6
Treating Customers Fairly (TCF) ...6
Underwriting & Credit Scoring ...6
Documentation ...6
Website Information ...7
Document Validity ...7
Application requirements ...7
Offer Validity ...7
2. IDOL (Instant Decision On Line) ... 8
IDOL...8
IDOL Credit Searches and Validity ...8
3. General Criteria ... 9
Solicitors ...9
Other Lenders’ Secured Loans ...9
Direct Debit ...9 Buildings Insurance ...9 Portability ...9 Overpayments ...9
4. Loan Details ... 10
Loan Size ... 10 Loan to Value ... 10Method of Repayment for Debt Consolidation ... 10
Sale at Undervalue ... 10
Fees and Charges ... 10
Loan Term ... 10
Method of Repayment ... 10
Loan Purpose ... 10
Acceptable Loan Purposes ... 10
Unacceptable Loan Purposes ... 11
Shared Ownership ... 11
Evidence of Deposit ... 11
Forms of Deposit ... 11
Applicants Own Funds ... 11
Gifted Deposit ... 11
Settlement of Debt ... 12
Right to Buy (RTB) ... 12
Maximum Loan & LTV ... 12
Underwriting and Packaging Guide
5. Applicant Details ... 13
Guarantors or Power of Attorney ... 13
Minimum Age ... 13
Maximum Age ... 13
Unacceptable Applicant Types ... 13
Borrowing into Retirement ... 13
First Time Buyer ... 13
Limited Mortgage History ... 13
Existing Homeowners ... 14
Unencumbered ... 14
Joint Ownership... 14
Maximum Number of Applicants ... 14
Previous Names ... 14
Bank Statements ... 14
Residency Requirement & Foreign Nationals ... 15
Know Your Customer “KYC”... 15
Proof of Residency ... 15
Third Party Residents ... 15
6. Employment and Income ... 16
Self-Employed / Employed Classification... 16
Minimum Income ... 16
Limited Company Directors / Partnerships / Limited Liability Partnership ... 16
Secondary Employment ... 16
Employed Income ... 16
Summary of Acceptable Income Types ... 16
Proof of Income Documentation Requirements ... 18
Irregular Income Calculation ... 18
Employment History ... 19
Employment History Verification ... 19
Self-Employed Income ... 20
Rental Income ... 21
7. Affordability ... 22
Debt To Income Ratio Calculation ... 22
Exclusions ... 22
DTIR Maximum ... 22
Loans to be repaid/Debt Consolidation ... 22
Breakdown of Funds ... 22 I&E Assessment ... 23 Additional Definitions ... 23 Adult Dependant ... 23 Child Dependant ... 23
8. Credit History ... 24
Underwriting and Packaging Guide
Credit Search ... 24
Detrimental Credit Search Information ... 24
9. Mortgage/Rental History ... 26
Mortgage History ... 26
Mortgages Shown on the Credit Search ... 26
Offset Mortgages ... 26
Existing mortgage or loans with GEMHL, igroup, First National (FN) or another GE Company ... 27
Payment Holidays ... 27
Mortgage/Rent Arrears ... 27
Housing Benefit /Support for Mortgage Interest (SMI) ... 27
Rental History/Arrears ... 27
10. Security and Construction Types ... 28
Acceptable Property Types... 28
Unacceptable Property Types ... 28
Minimum Property Value ... 29
Maximum Property Value ... 29
Valuation Requirements ... 29 Valuation Instructions ... 29 Mortgage Valuations ... 29 Photographs ... 29 Validity ... 30 Retypes ... 30
Home Reports (Scotland) ... 30
Audit Valuations ... 30
New Builds ... 30
Listed Buildings/Thatched Property ... 30
Public Sector Housing ... 30
Unusual Property Types ... 31
Timber Framed Construction ... 31
Northern Ireland ... 31
Land ... 31
Tenure ... 31
General ... 31
Unexpired Leasehold Term ... 31
Flying Freeholds ... 31
Properties on the Market/Recently on the Market ... 31
Environmental Issues ... 31
Additional Reports ... 32
Structural Engineer ... 32
Sulphate ... 32
Mundic Failure (Concrete Screening Test) ... 32
Underwriting and Packaging Guide
Intrusive Engineer’s Report ... 32
Essential Repairs/Retentions ... 32
Extensions ... 32
Valuation Department Referral ... 33
Valuation Decision in Principle ... 33
Non Standard Construction Types ... 33
Pre-cast Reinforced Concrete (PRC) ... 33
Cast-in-situ Construction ... 33
Metal Framed Construction ... 33
Single Skin ... 33
Large Panel Systems (LPS) ... 33
Definitions ... 34
Cavity Masonry ... 34
Cladding ... 34
Masonry ... 34
Underwriting and Packaging Guide
1. Packaging Guidelines
Packaging Guide [Document Purpose]
This Underwriting and Packaging Guide is to be read in conjunction with the current GE Money Home Lending Product Guide. Within this guide, GE Money Home Lending is referred to as “GEMHL”, “We”, “Us” or “Our”.
Applicability
The standards detailed in this document are applicable to all cases where the decision in principle date is on or after the 26th September 2014.
Plausibility & Reasonableness
As a lender we have an obligation to demonstrate that we have taken account of customer’s ability to repay their loan for the duration of the term. We are responsible, along with any advisor for making an assessment as to whether the loan is affordable. As part of our standard underwriting procedures “Appropriateness” and “Reasonableness” tests will be applied to: -
1. The applicant’s declared, and reasonably anticipated income, in relation to their age, experience, profession/industry and location.
We reserve the right to request additional income evidence where applicant(s) do not provide adequate information or if the applicant’s declared income in relation to their outgoings appears to over-commit them.
2. Any request for a mortgage term which extends beyond an applicant’s retirement age. This may include plausibility in respect of continued employment, down-sizing options, expected income levels, etc.
3. All documentation provided, ensuring that documents are consistent with the information and other documentation provided in support of the application.
Notwithstanding the successful meeting of our plausibility checks, we have an over-riding requirement that the applicant(s) be able to demonstrate an ability to meet the intended monthly mortgage repayment. This must be evident from all information and documentation received.
We must be satisfied that there is no reason to doubt the information or documentation provided by the applicant(s).
Treating Customers Fairly (TCF)
As a Responsible Lender, we are committed to treating our customers fairly. This includes obtaining sufficient information and documentation to ensure we are confident of the customer’s ability to repay the loan, the provision of information by GEMHL is adequate for their needs and that our contract results in a fair outcome.
Further information regarding TCF requirements can be found at www.tcfinfo.co.uk
Underwriting & Credit Scoring
We base our underwriting on an individual assessment of each application.
We also use a supplementary credit scoring and profile assessment. Credit scoring of an application as part of the packaging process must be completed via our IDOL (Instant Decision On Line) system. We may reassess the credit score and profile upon receipt of additional information following submission of the application.
Documentation
We will only accept original or first generation certified copies from either the submitting or introducing intermediary. Whilst copies are generally acceptable, we reserve the right to request sight of the original documentation.
The person certifying a document must sign and confirm that they have had sight of the original and that it is a first generation and true copy of the original. When certifying photographic identification, they must also confirm that it is a true likeness if they have seen the applicant face to face.
In most circumstances, we will accept a faxed or scanned copy of a document, provided the certified copy/original is to follow prior to completion.
Underwriting and Packaging Guide
Where a reference is provided to us by a third party (such as an accountant or lender), it is acceptable for them to provide that reference directly to us by fax/ scanned and emailed.
We are unable to accept copies of the following: • Application Form
• Valuation Report (including Photos) • Declaration of Income
• Direct Debit
• Mortgage Deed, Standard Security • Non-Owner Occupier Consent Form
• Consent to postpone a second/subsequent charge • Independent Advice & Witness Certificate
• Independent Advice by Solicitors to Occupier Certificate • GEMHL Accountant’s Certificate
Website Information
The application form can be found at www.gemoney.co.uk/intermediaries.
All other forms/references/addendums that you may require, can be found and printed from the Knowledge Base at www.gemhl.co.uk.
Document Validity
Where an Offer is not issued within 60 days of receipt, we may require further up to date documentation. This may include:
• An updated Application Form
• An updated Valuation Report or confirmation from the Surveyor of no change to the original assessment. (Valuations are valid for 90 days from first inspection) - See “Valuation Requirements” section
• Appropriate proof of current income
• Appropriate proof of mortgage payments since original application • Appropriate proof of rental payments since original application • KYC Documentation
We may also conduct an up to date credit search.
Any material status changes since the original application will be assessed accordingly.
Application requirements
The requirements for a fully packaged case are specified in the IDOL Submission Sheet for each case.
Intermediaries who submit partially completed applications will be informed by return what is missing. These packs will not be worked until all remaining items have been submitted.
Offer Validity
Offers are valid for 90 days (60 days for re-mortgage cases) from the date of issue. Offers that do not complete within this time are subject to reassessment and reissue at the prevailing criteria/rates.
Typically, we will require the following (although this is not an exhaustive list): • An updated application form
• An updated Valuation Report • Appropriate proof of current income
• Appropriate proof of mortgage payments since original application • Appropriate proof of rental payments since original application • KYC Documentation
We will also conduct an up to date credit search.
Underwriting and Packaging Guide
2. IDOL (Instant Decision On Line)
IDOL
IDOL is our advanced Decision in Principle facility. It has been designed to provide you with: • A Decision in Principle, based on the most up to date customer information
• A tailored list of supporting requirements, so you'll know exactly what to provide us with • Case-specific Decision in Principle documents
This intuitive tool boasts a number of key features to help you through the packaging process:
• Ability to adapt the Credit File information we use for our Decision in Principle, with extra detail you may be aware of • Decision in Principle valid for up to 45 days
• Full Plan/Product cascade to ensure you can advise on the most appropriate options • On-line referrals to our underwriting team, if further consideration is required • Confirmation of maximum borrowing (if unable to provide the Loan Requested)
IDOL can be used to check that an application is still suitable for submission to GEMHL, if any details change during the Packaging process. Simply create a “copy” and amend the relevant information.
A Submission Sheet based on the most up to date details of the enquiry (which is printed from the Decision options) must accompany all applications.
Any Decision in Principle is subject to all information received by us in relation to any subsequent application being up to date, accurate and not misleading in any way.
Should any subsequent application information differ from that provided for the original decision, the Decision in Principle would no longer be valid and the application would need to be re-assessed.
Additional information may be requested where any documentation is deemed not to fully support the application.
We reserve the right to make any additional and appropriate verification to satisfy our responsible lending policies. This may include, but is not limited to, checks regarding reasonableness of continued affordability where any loan term extends beyond an applicant's expected retirement age.
Where you indicate that loans are to be cleared, IDOL will not assess whether the loan agreed will be able to facilitate their redemption.
IDOL Credit Searches and Validity
Applications that have been input via IDOL will be subject to credit scoring and will have a credit search automatically conducted as part of the assessment process.
The IDOL credit search (and any Decision in Principle associated with it) will be valid provided the application is received within 45 days from the date of the original credit search.
Where any critical or material information on the application changes, (i.e. name (including spelling), address, time at address or date of birth) a new credit search will be conducted by us. The information on the revised credit search will supersede that which was used in the original IDOL assessment, and may therefore have an effect on our lending decision.
If a product rate is withdrawn, a deadline date will be communicated to provide you with an opportunity to submit the case on the old rate. If the application is not submitted by the date specified, the prevailing rates/criteria will be applied.
Any GE Money Base Rate (“Base Rate”) changes, which occur within the validity period for an IDOL enquiry, will be automatically applied.
Underwriting and Packaging Guide
3. General Criteria
Solicitors
Where possible, we will use our own nominated solicitor for the legal work that is required to complete the mortgage.
This will not extend to providing any advice or liability to the applicants in respect of the transaction. In some cases, the applicants may be instructed to assign their own solicitors to carry out the necessary legal work on their behalf, at their own cost. Typical situations would include Purchase or Transfer of Equity transactions.
Other Lenders’ Secured Loans
We will accept another secured loan charged to the security address, providing the charge ranks after our charge. In these instances, the total LTV of all charges must not exceed the plan maximum. The monthly payment in relation to the other lenders’ charge must be included in the affordability assessment.
Direct Debit
A GEMHL Direct Debit mandate must be completed for all applications.
For joint applications, the account the Direct Debit will be payable from, can either be in the joint names of the applicants, or one of their sole names.
For a sole application, the Direct Debit can be in joint names. The applicant must be party to the account that the Direct Debit will be payable from.
GEMHL will not accept repayment from third parties or accept guarantors / sureties.
Third party bank accounts are classified as an account where the holder is not party to the mortgage application and / or the account is registered in the name of a business.
Buildings Insurance
Suitable Buildings Insurance cover must be in place by exchange of contracts (for purchase applications), or completion of the advance (for re-mortgages).
Portability
GEMHL products are not portable, so existing borrowers moving house would be required to redeem the loan (this would include the payment of any applicable Early Repayment Charge).
Overpayments
Any future overpayment of a GEMHL account within the Early Repayment Charge period will be deemed as an early repayment and will be subject to the appropriate product Early Repayment Charge.
For 1st charge mortgages outside of any Early Repayment Charge period, which are up-to-date with the contractual monthly payments can make overpayments to the mortgage at any time. The customer must contact GEMHL prior to any overpayment to discuss the options available to them.
Underwriting and Packaging Guide
4. Loan Details
Loan Size
Our minimum loan amount is £25,001. The maximum loan amount is £500,000.
Loan to Value
The Loan to Value (LTV) is the loan amount as a percentage of the value of the security. The maximum available LTV is 80%
For Unencumbered mortgages, the maximum LTV is 50%
Method of Repayment for
Debt Consolidation
For all Re-mortgage applications, cheques in respect of debt settlement will be drawn for all debts to be repaid. These will be made payable to the lender but sent to the applicant.
For Purchase and Transfer of Equity applications the funds will be sent directly to the borrower(s) solicitors. It will be a condition of the offer that all credit items not included in the affordability assessments are repaid.
Up to date settlement figures are required prior to completion.
Sale at Undervalue
A number of situations may lead to the purchase price being lower that the valuation. If the vendor/builder is offering an
allowance/incentive or deposit, the Valuer will be required to consider the allowance/incentive or deposit in arriving at the valuation considering the affect the incentive may have on value. Please note that any allowance/incentive or deposit considered to be excessive, are likely to be discounted from the valuation and we will base our LTV calculation on the lower purchase price figure. The valuer must be aware of the reduced purchase price and state this in the valuation report.
Fees and Charges
A Completion fee is payable in all cases. This is added to the net loan amount, up to the maximum LTV for the product. The fee is payable on completion.
Packaging fees, intermediary fees, arrangement fees or application fees can also be added to the net loan amount up to the maximum Loan to Value (LTV) for the product.
Loan Term
The minimum loan term is 5 years. The maximum term is 35 years. .
Method of Repayment
All loans must be originated on a Capital Repayment basis where the mortgage is repaid by regular monthly payments of capital and interest over the term.
Loan Purpose
Acceptable Loan Purposes
• Purchase of the applicant's main residence (excluding Right-to-Buy)
• Re-mortgage of the applicant's main residence (including a Right-to-Buy within 5 years of the original purchase for England & Wales and 3 years for Scotland) for:-
- Re-finance; and/or
- Capital Raising (up to a maximum of £50,000 excluding unencumbered where no maximum applies); and/or - Debt Consolidation; and/or
Underwriting and Packaging Guide
- Transfer of Equity (transfer of equity applications for existing GEMHL customers are acceptable where the application requires capital raising or debt consolidation)
Unacceptable Loan Purposes
• Property purchased / being purchased under a Homebuyer Scheme • Right-to-Buy purchase
• Purchase of a Holiday Home (unless the advance is secured against the applicant’s main residence). • Self- Build
• Where the security comprises property purchased / being purchased under the Keyworkers / Starter Home Initiative • Mortgages where our charge will be subordinate to another charge (except in the case of a Council’s Statutory Charge
under a RTB purchase)
• Illegal, unethical or immoral purposes • Purchase of Timeshare
• Repayment of Business Debtors, Business Creditor and Business Supplier Arrangements Repayment of Tax Debts • Repayment of Gambling Debts
• Speculative Purposes
• Any purpose where “customer benefit” is not established • Any purpose that (in our opinion) may harm our reputation
• Transfer of Equity for existing GEMHL where the application does not require capital raising or debt consolidation. Purchase/Re-mortgage of a Second Home
• Let to Buy
• Buy to Let/Tenanted Properties • Business purposes
• Shared Ownership i.e. where the Applicant will not own 100% of the property after completion of our mortgage
Shared Ownership
Applications to purchase a property under a Shared Ownership Scheme are not acceptable. Re-mortgages where the final share in a property is being purchased are acceptable.
GEMHL will require 12 months mortgage and 12 months rental history.
All shared ownership properties will be treated as social housing for the purposes of LTV and plan selection.
Evidence of Deposit
We require evidence of the source of deposit where the amount is over £50,000. Evidence of deposit may also be requested if the amount is below £50,000, at the Underwriter’s discretion. For the For First Time Buyers we require proof of deposit in all cases.
Forms of Deposit
Applicants Own Funds
It is acceptable for the deposit to come from the applicant’s own funds, i.e. savings.
Gifted Deposit
Gifted deposits are acceptable from the following close relatives of the applicant(s): • Parent / Step-parent / Parent-in-Law
• Sibling
• Child / Step-Child / Son-in Law / Daughter-in Law • Aunt / Uncle
• Grandparent/ Grandchild • Godparent/ Godchild
• Individual with parental responsibility of a residing dependent child
A letter is required from the relative gifting the funds to confirm the amount, that the monies are a gift and are non-repayable. Depending on the amount / circumstances, proof may be requested from the donor that they are in possession of the deposit funds.
Underwriting and Packaging Guide
For applications in England and Wales, we will require the applicant’s solicitors to obtain a ‘Deed of Gift’ indemnity insurance policy, where:
• The value of the monetary contribution or gift exceeds £25,000
Settlement of Debt
We require any funds for unsecured debt consolidation to be sent directly to the borrowers solicitors in case of a house purchase or a transfer of equity.
In the case of remortgages, the cheque(s) must be made payable to the creditors and sent directly to the applicant to settle the debt.
It will be a condition of the mortgage offer that all credit items not included in both affordability calculations are repaid.
Right to Buy (RTB)
RTB Purchase applications are not acceptable.
A “RTB Re-mortgage” is defined as where the applicant is looking to re-mortgage a property which was originally purchased under a Right to Buy, within 5 years of the original purchase (For Scotland, the period would be 3 years).
Maximum Loan & LTV
RTB Re-mortgage is available on all plans, up to 70% LTV, (or the property/plan maximum, whichever is the lower).
For a RTB Re-mortgage, a pro-rata calculation of the original discount must be completed to establish the remaining proportional discount.
Years In Pre-emption Period England & Wales Scotland
Within the 1st Year 100% 100%
Within the 2nd Year 80% 66%
Within the 3rd Year 60% 33%
Within the 4th Year 40%
N/A
Within the 5th Year 20%
Example:
Applicant bought their property for £100,000 and got a 40% discount (£40,000). They are planning to re-mortgage the property after 18 months and the property is now worth £120,000.
£120,000 x 40% = £48,000.
As they are in the third year of pre-emption in England the amount of applicable discount is £48,000 x 60% = £28,800 Current property value £120,000 – Applicable discount £28,800 = £91,200
£91,200 x 70% (max LTV for an social housing house) = £63,840 maximum advance The advance will be subject to maximum LTV and plan restrictions
See “Mortgage History” section for the appropriate minimum history requirements.
Section 125 Agreements
The Right to Buy Notice (S125) must be provided for all RTB re-mortgage applications, detailing the person(s) awarded the RTB, the Purchase Price and the Discount given.
Underwriting and Packaging Guide
5. Applicant Details
Guarantors or Power of Attorney
We do not accept Guarantor applications or applications involving any Power of Attorney.
Minimum Age
Applicant(s) must be at least 18 years at date of IDOL decision. For FTB0, FTB1, LTM0 & GEM0 plans, applicant(s) must be at least 21 years old at date of IDOL decision.
Maximum Age
The loan must be repaid before the oldest applicants 70th birthday, if their income is included in the affordability calculation. For joint applications where one applicant’s income is not being used in the affordability calculation the maximum age limit for that applicant does not apply.
Where any applicant exceeds the maximum age limit at the end of the mortgage term, the applicant must receive Independent Legal Advice.
Unacceptable Applicant Types
GEMHL will not accept applications from the following types of applicants:
• The applicant lacking the legal capacity to enter into a mortgage contract • Applicants residing in the Isle of Man or Channel Islands
• Applicants who are self-employed landlords by profession. GEMHL defines a professional landlord as an individual for whom letting properties is the main or sole form of income and / or an individual who owns more than 4 Buy-to-Let properties
• Applicants with Diplomatic Immunity or Foreign Embassy Staff • Companies (Limited and Public Limited)
• Partnerships
• Limited Liability Partnerships • Trusts
• Charities
• Unincorporated Societies
• Personal Representative (Deceased) where the Personal Representative / Executor is offering the estate of a deceased as collateral
Borrowing into Retirement
All applicants must confirm their expected retirement age. Where the mortgage term will continue beyond the applicant’s declared retirement age or their 65th birthday, whichever is sooner, the applicant is required to provide an explanation of affordability and confirm plans on how they will continue repaying after retirement unless their income is not being used in the affordability calculation.
GEMHL will also assess the feasibility of an applicant continuing in their current profession until their stated retirement age. Where it is not feasible for them to continue in their current profession/role additional information may be requested to confirm their future employment plans.
Where the term takes the applicant past their stated retirement age and they are unable to provide sufficient evidence relating to their income post retirement, the income must be excluded from the affordability calculation.
First Time Buyer
First Time Buyer is someone who has not owned a property in which they reside(d) in the 3 years prior to GEMHL’s IDOL Decision.
Limited Mortgage History
Applicants who have owned a property in which they reside(d) in the 3 years prior to GEMHL’s IDOL decision, but are not able to provide a mortgage history for the 12 months prior to GEMHL’s IDOL decision.
Underwriting and Packaging Guide
Existing Homeowners
Applicants who:• Currently own a property in which they reside and can provide 12 months mortgage payment history for the 12
months prior to GEMHL’s IDOL decision.
• Recently sold the property in which they resided (up to a maximum of 3 months prior to GEMHL’s IDOL decision)
and can provide 12 months mortgage history prior to the sale date. Proof of sale of the property is required to verify the date sold.
Unencumbered
We will consider the mortgage of an unencumbered property (applicant(s) main residence) or the sale of an unencumbered property with the subsequent purchase of another property (to become GEMHL's security) provided:
• The applicant(s) (at the date of the IDOL DIP) have owned this property for a minimum of 12 months and have been mortgage free (unencumbered) for a minimum of 3 months
• Any previous mortgage history over the last 12 months will be considered • The applicant(s) minimum age is 21 years old (at date of IDOL DIP) • The applicant(s) must reside at the security on completion • The applicant(s) must provide a Declaration of the Use of Funds
• The LTV is less than or equal to 50% based on a minimum property valuation of £90,000
• Where the property is subject to probate and the property has not been transferred into the applicant’s name, a death certificate and copy of the will are required to evidence ownership of the property for the minimum period of 12 months
Joint Ownership
Married or unmarried applicants who own property jointly must apply in joint names. Unmarried applicants who currently own property in their sole name but want their partner to be resident in the security property may apply in a sole name. The non-borrowing partner will be required to sign our Occupiers Consent (thereby waiving their residency rights).
Independent Legal Advice may also have to accompany the Occupiers Consent in certain situations e.g. where the occupier is aged 70 years old or over or where the applicant is vulnerable.
Maximum Number of Applicants
The maximum number of applicants is two.Previous Names
Applicants must provide details of any other names (such as maiden names), they have used within the last 3 years. All names, previous or otherwise, must be included in the initial IDOL Decision in Principle.
Bank Statements
We reserve the right to request bank statements on any product. If provided the bank statements must satisfy the following: • Show the name of the applicant(s)
• Cover the requested period prior to submission of the application • Be no more than 60 days old at the time of offer
• Must reflect all applicant(s) income during the 60-day period (90 days for self-employed)
• Must reflect an overall satisfactory financial track record, with an over-riding requirement that the applicant(s) be able to demonstrate an ability to meet the intended monthly mortgage repayment
Underwriting and Packaging Guide
Residency Requirement & Foreign Nationals
We can accept applications from Foreign Nationals, however all applicants must:
• Live and work in the UK (UK citizens working abroad are acceptable where their main residence is in the UK and they are a UK taxpayer)
• Be UK taxpayers (where income is being used in support of the application). • Have resided in the UK for the last 3 years
In addition:
• Applicants residing in the Isle of Man and Channel Islands are not acceptable
• Non-UK citizens (UK & European Union (EU) Nationals and Non-European Union Nationals) must provide evidence of a minimum employment history of 2 continuous years in the UK (where income is used in support of the application) • Non-European Union citizens must provide evidence confirming indefinite rights to remain in the UK
Know Your Customer “KYC”
Prior to completion of any advance we require satisfactory evidence of the applicant(s) name and address. This evidence must be provided with the initial application and cannot be made a condition of any formal Offer.
Please refer to the Knowledge Base at www.igrp.co.uk/izone for more information.
Proof of Residency
All applicants must be able to provide a satisfactory UK address history covering the last three years. Proof of Residency is required, evidencing the last 12 months. Acceptable proof of residency includes:
• Voters Roll • Utility Bills • Bank Statements • Mortgage Statements • Council Tax Bills • Credit Card Statements • Benefit Award Letter
• Presence of a bank loan, mortgage or secured loan on the GEMHL credit search. The item must be active, at least six months old, and can only be used to cover proof of the current residency
NOTE All statements or bills must have been issued to the applicant at the relevant address and confirm residency at that address within the last three months, plus residency at that address twelve months ago. Please note the applicant will need to provide proof of residency for all properties in the last twelve months.
Third Party Residents
Anyone aged 17 or over who will reside at the security address, must sign a Non-Owner Occupier Consent Form. This excludes applicants and their children.
Where the credit search reveals such a third party, yet the applicant has not indicated that they will reside, the applicant must confirm in writing that the person no longer lives at the security address.
Underwriting and Packaging Guide
6. Employment and Income
Self-Employed / Employed Classification
If any income from employment is required within the affordability calculator then the application will be classed as self-employed and all relevant policy restrictions will apply.
Minimum Income
The minimum net application income is £14,000 per annum, excluding all benefits and maintenance.
Limited Company Directors / Partnerships / Limited Liability Partnership
Limited Company Directors / Partners who have a total shareholding of less than or equal to 25% will be treated as employed. If their total shareholding (in the company they are employed by) is more than 25% then they will be classed as self-employed. For joint applications, where both applicants work within the same or linked businesses / Partnership / Limited Liability Partnership and their combined shareholding is more than 25% then their income will be treated as self-employed.
Secondary Employment
Where an applicant has secondary employment, that income can only be included if the associated employment period is greater than 6 months. Confirmation of income would be required in accordance with the requirements for primary employment. The secondary employment must be permanent and the overall time commitment to both jobs must be seen as reasonable and maintainable. Employment from seasonal work is unacceptable.
We will only accept employment/self-employment income from a maximum of two sources (excluding Pensions, Benefits, Maintenance and Rental Income) per applicant.
Secondary self-employed income or income from seasonal work cannot be included in the application.
Employed Income
Summary of Acceptable Income Types
Type Source Acceptable
P.A.Y.E. • Basic Income • Overtime • Commission • Shift Pay • Bonus • Location Allowance • Company Car Allowance
• Petrol / Private Mileage Allowance
• Directors / Partners Emoluments where P.A.Y.E. • Maternity / Paternity / Adoption Pay
Acceptable
• Statutory Sick Pay (SSP) • Occupational Sick pay (OSP) • Self-Certification of Income
Unacceptable
Self-employed
• Share of net profit after deductions in relation to Sole Traders / Partners / Contractors
• Salary and dividends after deductions in relation to Directors of Limited Companies
Acceptable
Underwriting and Packaging Guide
Pension • Private Pension • Occupational Pension • Annuity • State Pension • War Pension • Widows Pension Acceptable Disability Benefits• Disability Living Allowance
• Incapacity Benefit / Employment and Support Allowance • Industrial Injuries Disablement Benefit
• Carer’s Allowance
Acceptable
Child Benefits
• Child Benefit
• Child Tax Credit (including Care) • Working Tax Credit
• Widowed Parents' Allowance
Acceptable
Other Benefits
• Widows Benefit
• Attendance Allowance (Applicants & Dependants) • Carer’s Allowance (Dependants)
• Constant Attendance Allowance • Disability Living Allowance (Dependants)
Acceptable
• Income Support • Job Seekers Allowance • Housing Benefit • Pension Credit • Bereavement Benefit
Unacceptable
Other
• Maintenance / Alimony Acceptable
• SC60 / CIS Vouchers or equivalent • Housekeeping
• PPI / MPPI Claim • Lodger’s Rent
Unacceptable
Underwriting and Packaging Guide
Proof of Income Documentation Requirements
Income Type Income Level Acceptable Proof Minimum Requirements
Basic 100% • Computer Generated/Online Payslips • Pay Packets/Envelopes • Handwritten Payslips • P60 in support of the above • Employers reference in support
of the above
For applicant(s) who are paid monthly / four-weekly, 2 out of the last 3 monthly payslips are required.
For applicant(s) who are paid weekly, 3 out of the last 6 weekly payslips are required.
Latest payslips must be a maximum of 60 days since issue at offer approval
Where the latest payslips exceeds 60 days old, up to date payslips must be a condition of the mortgage offer. Pay Packets/Envelopes or handwritten payslips must be supported by a P60.
Where the applicant has not been with their current employer since the beginning of the current tax year an employment reference can be provided as a substitute for the P60.
Payslips should clearly show the company name, employers name and date, in addition to the details of the income.
Regular
(income that does not fluctuate)
Irregular
(income that does fluctuate)
50%
Pension 100%
• Pay advice
• Letter from pension provider • Latest 2 months consecutive
bank statements
Evidence must show the amount frequency and source of the payment
Maintenance /
Alimony 100%
• Court Order letter • Solicitors letter
• Private Child Maintenance Agreement
• CSA Award AND
Latest 2 months consecutive bank statements
Evidence must show the amount frequency and source of the payment
Benefits 100%
Latest 2 months consecutive bank statements
OR
Award letter
Benefit can be utilised in the affordability assessment where the total core income before benefits is >= £14,000. Evidence must show the amount frequency and source of the payment
Rental
Refer to
Rental Income
• Current Assured Shorthold Tenancy Agreement
• Letter from an Estate Agency / Registered Letting Agency • Latest 2 months consecutive
bank statements
Evidence must show the amount, frequency and where applicable source of the payment
Irregular Income Calculation
The amount of acceptable Irregular Income will be calculated by determining the irregular as a % of the monthly total gross income. This percentage will then be applied to the net monthly income to ascertain the irregular amount.
Only bonuses with a frequency greater or equal to monthly can be used in support of an application. Further evidence of irregular income may be required at the underwriter’s discretion.
Underwriting and Packaging Guide
Employment History
Applicants must have been in their current employment for a minimum of 6 months.
Income from applicants who are under Notice of Termination of Employment or Redundancy is not acceptable.
Employment History Verification
• Evidence of employment history is required to cover the minimum periods stated. Where sufficient employment history is not evident from the payslips provided additional documentation may be requested: Payslip showing Gross-to-Date income from the previous tax year confirming an employment period greater than 6 months; or
• P60 from the previous tax year, confirming minimum employment period; or
• Bank statement (dated on or after month 6 (but no later than 18 months ago) clearly showing salary credit from the employer
Previous Self-Employment History Verification
Where the applicant has previous self-employment within the last 12 months suitable proofs must be provided (see “Self- Employed Income” section for appropriate documentation).
Applicants Employed by Family
Applicants who are employed by family are acceptable subject to payslips being computer-generated, showing Gross-to-Date earnings and 3 months evidenced payments by direct credit.
Foster Carers
Applications from Foster Carers are acceptable. Applicants in receipt of P.A.Y.E payslips will be classified as employed. Those in receipt of Remittance Advice from the relevant authority will be classified as Self-Employed.
Changes to Circumstances
GEMHL requires all applicants to declare any known or expected change to their future circumstances which may impact their income or expenditure. Examples of a change to circumstance may be as listed below (not exhaustive):
• Maternity / Paternity Leave • Adoption Leave
• Notice of Redundancy • Divorce
• Illness • Career Break
Where a change in circumstance is identified all applicants will be required to provide an explanation of how the mortgage will continue to be affordable.
Income from applicants, whose change in circumstance is permanent and resulting in the loss of that income, will not be included in the affordability calculation. Where the change in circumstance is permanent resulting in a reduction of income, the reduced income only should be included in the affordability calculation. Examples of this type of change may be:
• Applicants in receipt of maintenance payments which cease when they marry, who have declared they are now re-married or are planning to re-marry
• Applicants who have received notice of redundancy
• Applicants who are currently on maternity / paternity / adoption leave and have confirmed they will not return to work Where the change to circumstance is temporary, confirmation should be sought from the employer or relevant issuing party to confirm:
• Anticipated / confirmed return to work date (if applicable) • Date the change will come into effect
• Known changes to salary/payment/role including any change to contracted hours (for P.A.Y.E) • Anticipated/confirmed remuneration
Underwriting and Packaging Guide
Inclusion of Income in the affordability assessment:
Type of Change To Income Future Anticipated Income Inclusion / Exclusion in Affordability
Permanent
Loss of Income Excluded
Reduction Include Future Income
Temporary
< Current Income Include Future Income > Current Income Include Current Income
Contract/Temporary Employees
Applications will be accepted for contract or temporary workers, provided they have been in employment with the same employer for the last 6 months. Confirmation must also be provided that the contract will be on-going and renewed. Income from seasonal work is unacceptable.
Probationary Periods
We will accept applicants who are still in a probationary period provided they have been with their current employer for 6 months.
Self-Employed Income
Self-Employed History
The applicant(s) must have been self-employed in current business for a minimum of 24 months for this income to be included in the application.
Self-Employed Income Variance
When calculating the usable income:
• If the proof shows decreasing amounts, the latest amount should be used • If the proof shows increasing amounts, an average amount should be used
Self-Employed Income Verification
We will require the GEMHL Accountant’s Certificate of Income, or the last 2 years’ HM Revenue and Customs Tax Calculations (SA302’s). Alternatively last 2 years’ audited accounts can be provided, however, they must be supported by a GEMHL Accountant’s Certificate and/or SA302 documentation.
Proofs (Months since end of latest financial period)
Less than 18 months Greater than or equal to
18 months GEMHL Accountant’s Certificate for the last 2 complete years of trading
OR
HMRC Tax Calculation (SA302). The following formats are acceptable: • Postal Tax Return : Paper SA302 for the last 2 complete years of trading • Online Self-Assessment: Printed SA302 for the last 2 complete years of
trading AND printed ‘Tax Year Overview’ corresponding to the same period
AND
Latest 3 months “Business” Bank Statements
(Personal bank statements are acceptable for sole traders where they do not have a business account)
Underwriting and Packaging Guide
Accountant’s Qualification
Any Accountant Certificate or accounts used to support an application must be provided by a satisfactorily qualified accountant. The applicant’s accountant must be traceable through their respective body, hold a valid licence to practice and have one of the following recognised qualifications:
• ACA • FCA • ACCA • FCCA • ACMA • FCMA
If the Accountant is related to the applicant, we would require confirmation from an alternative suitable qualified Accountant that they have reviewed the accounts and can confirm figures provided.
Rental Income
If the applicant has an existing property which is let, the rental income cannot be used in support of the application.
However, where the income received from the tenancy is sufficient to cover the secured loans registered against that property, both the income and those associated loans can be ignored from the DTIR calculation.
Where the income does not cover the associated secured loan payments, both figures must be included within the IDOL Decision in Principle.
The Assured Shorthold Tenancy agreement must be provided to confirm the rental amount.
Underwriting and Packaging Guide
7. Affordability
Debt To Income Ratio Calculation
We use an affordability calculation to ensure that the applicant’s monthly credit commitments are within a certain percentage of their monthly net income. This calculation is called the Debt to Income Ratio (DTIR).
When assessing affordability, the higher repayment of each commitment should be taken into consideration, whether this is from the application form or the credit search.
The DTIR is calculated as follows:
(A)+ (B) + (C) + (D) + (E) Total combined net monthly income
(A) = GEMHL projected monthly mortgage payment (at the higher of the Limited Offer Rate or the Reversionary Rate) (B) = The total of any monthly payments, for any other mortgages or secured loans that are not being cleared/redeemed. (C) = The total of any monthly payments for any unsecured loans (including any attachment of earnings) which are not being
cleared/redeemed. Any maintenance/alimony must also be included.
(D) = The total of any payments for revolving credit balances (e.g. credit cards) which will remain after completion of our loan. This would be taken as the highest of 3% of the outstanding balances or actual payment declared.
(E) = Any payment made on a default/delinquent account, CCJ or Administration Order
Exclusions
The following are excluded from the DTIR calculation:
• Loans with less than six months to run (i.e. the remaining balance is less than six times the monthly payment) • Overdraft/current accounts
• Defaulted/delinquent accounts, unless being serviced by the customer and confirmed on the application form • Payments in respect of communication contracts
DTIR Maximum
Maximum Net DTIR for all applications is 50%
Loans to be repaid/Debt Consolidation
All existing debts must be quoted on the application form, (irrespective of whether they are to be paid off or not), including balance, current monthly payment, repayment type and remaining term.
NOTE: Further evidence of the applicant(s) ability to redeem any/all of their debts may be requested where the source of the funding is not clear.
Breakdown of Funds
A breakdown of the use of funds is required if the applicant is receiving more than £20,000 from the advance, after any debts have been discharged.
Underwriting and Packaging Guide
I&E Assessment
An affordability assessment will be carried out based on the applicants’ net income and will take into account the applicants declared committed expenditure, basic essential expenditure and basic quality of living costs.
This assessment will ensure that the requested loan is affordable for the applicant based on their declared income and outgoings. This calculation will use the highest amount between the expenditure declared by the customer and the GEMHL Minimum Income Standards (MIS) data for the corresponding family structure.
The affordability is calculated as follows:
Total combined net monthly income - (F+G+H+I+J+K+L) F = A+B+C+D+E ( From DTIR Calculation)
G = Household Bills & Services H = Living Costs
I = Leisure & Recreation J = Travel & Motoring K = Child Care
L = Ground Rent & Service Charge
In the event that the result of the above calculation is negative, we will decline the application as the total income is not sufficient to support the requested loan amount.
A request for a reduced loan amount can be actioned by creating a copy of the original Decision in Principle in IDOL. Alternatively if the applicants have additional provable income, a copy Decision in Principle can be created and the additional income can be added to support the original requested loan amount.
Examples for expenditure type are shown below, however they are not exhaustive:
Households bills & services: Utility bills, council Tax, water rate, communication costs, TV license, household insurance or any other household expenditure.
Living costs: Food, furniture, clothing, property maintenance costs.
Leisure & recreation: Social activities, entertainment, alcohol, tobacco consumption, Travel & monitoring: Public and private travel costs, taxes, insurances, motor maintenance.
Additional Definitions
Adult DependantAn adult over 18 years old who is not party to the application, resides in the property and is financially dependent on the applicants. Child Dependant
Underwriting and Packaging Guide
8. Credit History
Credit Search
GEMHL uses a credit search to establish the applicant’s credit profile. History within the credit search will help determine the capacity and willingness of the applicant(s) to repay the mortgage they have applied for. Specific areas include;
• The product selected corresponds with the adverse credit declared on the application form and/or identified on the credit search
• Any undisclosed linked addresses will need to be searched and explained. Please also provide full details of period occupied, tenure and other relevant information
• Voters Roll History for the last 12 months
• Outstanding credit commitments matching those disclosed on the application form
An enquiry through IDOL includes a credit search being automatically conducted and reviewed. These are valid provided the application is received within 45 days and Offered within 75 days from the date of the original credit search.
Detrimental Credit Search Information
All references to time periods relate to the IDOL enquiry date or date the application is received by GEMHL (whichever is the earlier). In all cases, we will require an explanation for why the detrimental credit occurred.
Worst CAIS Status
For FTB 0, FTB 1, LTM 0 and GEM 0 CAIS information will be assessed – applications with worst CAIS status greater than 2 in the last 6 months are unacceptable on these plans.
County Court Judgments and Court Decrees
For all plans we will disregard:
• 1 County Court Judgment (CCJ) less than £250
• Any CCJ registered more than 24 months prior to the latest IDOL Decision date • Any CCJ satisfied more than 12 months prior to the latest IDOL Decision date
Registered Defaults
For plan selection we will disregard: • 2 defaults less than £100 each
• Any default registered more than 24 months prior to the latest IDOL DIP date
The declared payment on any defaulted or delinquent account should be included in the applicant(s) affordability calculation.
Repossessions
Applications from applicants who has previously been repossessed (whether voluntarily or involuntarily) are unacceptable.
Bankruptcy, Sequestration and LILA
Applications from applicants who have previously been bankrupt are unacceptable.
Payment Arrangements
DMP, DMA and DAS are acceptable when the arrangement was satisfactorily completed more than 12 months ago subject to plan. Where an applicant has had a previous DMP, DMA or DMS this must be declared via the IDOL Decision in Principle. Where a DMP, DMA or DAS is subsequently identified and has not been declared via IDOL the Decision in Principle is void.
Where an applicant has had a previous DMP, DMA or DMS the application will be reviewed on an individual basis taking into account the customer previous and current secured and unsecured account conduct.
GEMHL reserves the right to decline any applications where an applicant has had a previous DMP, DMA or DMS. Any previous IVA (Individual Voluntary Arrangement) or DRO (Debt Relief Order) is unacceptable.
Underwriting and Packaging Guide
Administration Orders
We treat court registered administration orders as a Default.
Cautions or Inhibitions
Other lenders seeking to obtain repayment of a debt can also register cautions against the property. This will not affect the scheme but the caution will need to be settled on or before completion of our mortgage.
Underwriting and Packaging Guide
9. Mortgage/Rental History
Mortgage History
For joint applications GEMHL will allow cases where only one applicant has a mortgage history, where both applicants have mortgage history both should be used.
Evidence is required for all mortgages held (I.e. any first mortgages or secured loans, on the main residence and/or any Buy To Let properties). If an applicant has an offset mortgage product, please also refer to the Offset Mortgages section.
Proof of mortgage payments can be from: • Credit search payment profile information,
• Mortgage Questionnaire / Building Society Questionnaire (BSQ) • Mortgage account statement
• Bank statements (showing the mortgage payments being made from the applicant’s account) with supporting confirmation of the amount due
All proofs must cover the 12 month minimum period.
Where evidence of mortgage payments is required, in lieu of CAIS confirmation on the credit search, GEMHL will accept an account statement or BSQ. The document must be no more than 60 days old at the point of offer.
Where the document has expired evidence of subsequent payments must be sought direct by GEMHL by telephone confirmation with the lender or evidenced on bank statements or with an updated payment history or BSQ.
Payment slips are unacceptable as evidence of payment.
Evidence of subsequent payments following expiry of the original document must be a condition of the offer. However, any subsequent arrears will invalidate any offer already issued to the customer.
Where an applicant has moved or redeemed a mortgage within the last 12 months proof of payments will be required for the previous mortgage. Applicant(s) must not have re-mortgaged a 1st or 2nd Charge mortgage within the last 3 months. Further verification may be obtained where the credit search information is unclear.
An explanation for the occurrence of previous mortgage arrears must be provided.
Mortgages Shown on the Credit Search
Mortgage Payment Profiles from the credit search conducted through IDOL will be acceptable, unless any contradictory account information is provided.
Offset Mortgages
If an applicant currently has an offset current account mortgage which consists of their mortgage with a current account and/or savings account in one combined facility (such as the Virgin One Account), a full account statement or BSQ dated no more than 60 day old at the point of offer is required. Conduct is considered satisfactory if the following is evidenced:
• Consistent monthly credits over the last 12 months
• Total credits must equal or exceed the total debits (including interest charges) within each monthly period for the last 12 months
Inconsistent payments (i.e. monthly periods without credits) within the last 12 month period is unacceptable and will be classed as arrears even if within the term and conditions of the account.
If an applicant has an offset mortgage where the mortgage and linked current and/or saving accounts remain distinctly separated there are no additional requirements and they should be treated as a standard mortgage product.
Underwriting and Packaging Guide
Existing mortgage or loans with GEMHL, igroup, First National (FN) or another GE
Company
We will consider an application where the applicant has a good payment record with GEMHL, First National (FN) or any other GE Company.
Payment profile of any previous GEMHL, First National (FN) or any other GE Company accounts will be reviewed. Any account where the arrears history was unsatisfactory will not be considered for new lending.
We will refinance an existing GEMHL or FN account on any product (except FTB0 or FTB1) subject to the new products adverse history criteria being met.
Payment Holidays
Existing mortgage accounts with payment holidays in the last twelve months are acceptable subject to confirmation that the holiday was approved and has since ended, the mortgage was up to date at the date of the arrangement and that repayments have recommenced.
Mortgage/Rent Arrears
Applicant(s) must be up to date at the point of application and not have missed any payments in the last 12 months. In determining arrears history, the intermediary must obtain a full payment record for the required period.
Each payment must have been made within 30 days of the due date. Where the contractual payment made is 90% or greater of the payment due, this will not be classed as a missed payment.
Whilst we will consider payments that are paid early in the following month, it is not acceptable for a month to be missed and a double payment made at a later date.
Housing Benefit /Support for Mortgage Interest (SMI)
Applicants who have been in receipt of Housing Benefit or SMI in the last 12 months are not acceptable.
Rental History/Arrears
For FTB0, FTB1, LTM0 & GEM0 plans we require proof of the last 12 months rental history (where applicable). Where a full 12 months is not available, any rental history available within this period should be evidenced.
In the instance that applicants have rented separately, proof of rental history for both applicants will be required. Applicant(s) must be up to date and had 0 arrears in the last 12 months.
Rental Reference
Rental history must be obtained in respect of rental from a Housing Association, Local Authority or Registered Letting Agency. Proof can be in the form of:
• A written reference • Rental account statement
• Bank statements and supporting AST to confirm monthly rental payment Payment slips are unacceptable as evidence of payment.
Underwriting and Packaging Guide
10. Security and Construction Types
Acceptable Property Types
MAXIMUM LOAN TO VALUE
HOUSES Private 80%
Ex Local Authority or Social Housing 70%
FLATS & MAISONETTES Private 80%
Ex Local Authority or Social Housing 50%
100% FLAT ROOF HOUSE Private 60%
Ex Local Authority or Social Housing 50%
• Ex Local Authority criteria will apply to all social housing, including but not limited to Council, Ministry of Defence, Police, Coal Board, Housing Association and former shared ownership properties
• All LTVs are subject to plan maximum
Unacceptable Property Types
Property Type Information
GENERAL
(Relevant to all property types)
New Build Properties without suitable warranty (NHBC guarantee, Zurich Municipal Guarantee, Architects Completion Certificate or Premier Guarantee/LABC Warranty)
Properties suffering on-going structural movement or insurance claims Grade I & Grade II* listed properties (Grade A & B in Scotland)
Back to back / Cluster Homes
Properties located within 20 metres of a mine entry/feature
Properties within 100 metres of high voltage electrical supply apparatus (excluding small substations)
Properties subject to Compulsory Purchase Orders Large Flying Freeholds (>20% of floor area)
Japanese Knotweed located within or immediately adjacent to the site, defined as category 4, 3 or 2 in RICS paper IP 27/2012.
Properties without an internal WC or bathroom
Properties subject to onerous occupancy restrictions including agricultural restrictions Shared Ownership/Shared Equity schemes (only acceptable if applicant will own 100% of the interest on completion). These will be treated as social housing.
Properties subject to enforcement notices
Crofting properties/land (will be considered if certification is available confirming property has been decrofted)
Buy-to-let or tenanted properties
Self -build properties within 3 years of completion of construction (completion defined as the date of issue of the Building Regulation final completion certificate or Architects Completion Certificate (whichever is later))
Properties with a commercial element
FLATS & MAISONETTES
Freehold Flats in England and Wales
Leasehold Flats with a lease term < 85 years unexpired (such cases will each be considered on their own merits)
Flats in Local Authority or ex Local Authority owned blocks over 4 storeys in height or with more than 50 units in the block (individual cases will be considered based on quality of location and firm sales evidence)
Flats in private blocks over 6 storeys in height (individual cases will be considered based on quality of location and firm sales evidence)
New Build Flats/Maisonettes “0” years old or awaiting first owner occupation
Flats/Maisonettes located in Local Authority owned blocks with balcony/deck/walkway access Tyneside flats
Studio Flats
Flats above commercial premises NON STANDARD
CONSTRUCTION
Underwriting and Packaging Guide
Minimum Property Value
The minimum property value is £90,000 for all property types. This applies to the market value in existing condition.
Maximum Property Value
The maximum property value outside London and the South East is £1,000,000. Within London and the South East the maximum is £1,500,000.
London/South-East comprise the following regions: • Bedfordshire • Berkshire • Buckinghamshire • East Sussex • Essex • Hampshire • Hertfordshire • Kent • Greater London • Oxfordshire • Surrey • West Sussex
Valuation Requirements
Valuation InstructionsAll valuations must be instructed via our panel manager, e.surv, who will allocate the valuation to one of the following panel firms: • Colleys (Surveyors & Valuers)
• Connell Survey & Valuation
• Countrywide Surveyors & Countrywide Scotland t/a Harvey Donaldson & Gibson • DM Hall
• e.surv
• J & E Shepherd (Scotland) • Lamberts
• Valunation e.surv Contact Details: Mick Beal
Head of Servicing and Relationship Management Panel Management
Tel: 01536 535595
Mortgage Valuations
• A full internal inspection is required on all 1st Charge cases • Must be undertaken by surveyor on our Valuation panel • GE Money Home Lending valuation form must be utilised • Valuation form must be fully completed signed and dated • 5 photographs must be provided (see below for further details) • Valid for 3 months (see below for further details)
Photographs
It is a requirement that surveyors provide 5 photographs (front, rear, kitchen, bathroom and street view) and these must be submitted with the valuation for the case to be processed.
Photographs must be first generation scanned/digital images or physical photographs taken by the surveyor – faxed copies are not acceptable.
Underwriting and Packaging Guide
Validity
Valuation reports are valid for 3 months. Valuations that expire during the offer period will be honoured until the end of the initial offer period. Once the offer has expired a new valuation report will always be required. We are unable to use a Valuation Report over 6 months old at any time.
Retypes
Retypes undertaken by panel members are acceptable for reports dated up to one month after the original inspection date. After this a new valuation will be required.
Home Reports (Scotland)
We will require a mortgage valuation carried out on the appropriate form by a member of our panel. If the original home report has been completed by one of our panel members, then we will accept a retype within one month, in line with our current criteria. If the report is over a month old, then a new inspection must take place.
Audit Valuations
An audit valuation will be required on all cases where the loan is equal to or more than £350,000.
New Builds
• All properties built within the last 10 years must have professional 3rd party supervision (NHBC Guarantee, Zurich Municipal Guarantee, Architects Completion Certificate or Premier Guarantee/LABC Warranty)
• A re-inspection will be required by the original surveyor to confirm satisfactory completion and valuation figures
• The Valuer will have regard to incentives in arriving at the valuation and exercise professional judgement in considering the affect incentives have on value. Please note that any incentives considered to be excessive are likely to be discounted from the valuation
• CML disclosure of incentives form must be provided to the valuer prior to the valuation being completed. (Panel already instructed with this requirement)
• GEMHL will not accept any financial incentives and these will be discounted from the purchase price to arrive at a net purchase price. This may take the form of a discount, deposit, cashback, guaranteed rent, mortgage subsidy, Stamp Duty payments, moving costs, legal fees or valuation fees. Please note that this is not an exhaustive list.
• At the discretion of the Valuation Department, GEMHL may accept non financial incentives, provided they are not considered excessive, and the Valuer is satisfied that these do not influence the Market Value
• Where financial incentives are offered, GEMHL will lend against the lower of the net purchase price or Market Value. • Where non-financial incentives are offered, GEMHL may include these in the purchase price where this is supported by the
Market Value. GEMHL reserve the right to discount any incentive where they are considered excessive to arrive at a net purchase price, which may be used for lending purposes.
• New build properties will be valued as new including any “new build premium” up to a maximum of 15% • Any new build premium considered by the valuation department to be excessive will be investigated and
recommendations/restrictions may be imposed
• One “new” comparable can be included in the valuation report together with two resale comparables • New build flats/maisonettes will not be considered acceptable for lending purposes
• A property is to be considered new if it is “0” years old or awaiting first owner occupation. This will apply to both flats and houses
• Self-build properties will not be considered acceptable within 3 years of completion of construction. Completion is defined as the date of issue of the Building Regulation final completion certificate or Architects Completion Certificate (whichever is the later)
• On purchases where there is a part exchange transaction, the valuation department may require sight of the valuation for the property being part exchanged
Listed Buildings/Thatched Property
• The maximum LTV for a Grade II listed property (Grade C in Scotland) is 50%
• Grade I and Grade II* listed properties (Grade A and B in Scotland) will not be considered acceptable for lending purposes. • The maximum LTV for a thatched property is 50%
• Grade II and/or thatched properties will only be considered for lending purposes where they are in a good condition and no essential repairs are required. It must be confirmed that there are no breaches of the listed status and that there are no outstanding notices
• It must also be confirmed that on-going buildings insurance is available and that the insurers are aware of the listed/thatched status
Public Sector Housing
All social housing, including, but not limited to Ministry of Defence, Police, Coal Board, Council and Housing Association will be viewed as ex Local Authority and LTV criteria applied accordingly.
