News Column

Abbey for Intermediaries-Our residential lending policy changes are now live

July 28, 2014

ENP Newswire - 28 July 2014

Release date- 25072014 - Our residential lending policy changes are now live.

We have made some important changes to our residential lending policy in line with competitors and current market conditions. These latest changes are effective from Friday 25 July and reflect our continued prudent approach to lending and affordability.

Summary of changes

Interest only

Minimum equity buffer increased to GBP150,000 for Interest Only applications where sale of the mortgaged property is used as the repayment vehicle.

Maximum age at maturity is 65 years for applications where any element is on Interest Only. The maximum term for existing Santander Home Movers borrowing the same or less, with no change to the term or interest only amount, remains at 75 years.

Our Interest Only guide to acceptable repayment vehicles has been updated to reflect these changes.

New build improvements

Maximum mortgage term for Help to buy: equity loan scheme increased from 25 to 35 years.

Maximum LTV for new build flats increased from 75% to 80%.

The maximum LTV for Buy to Let new build flats remains unchanged at 70% LTV.

Help to Buy: mortgage guarantee scheme

To align with changes in the scheme rules, the maximum income multiple for mortgages under the Help to Buy: mortgage guarantee scheme must be less than 4.5 times income.

Affordability changes

New single indicative maximum loan amount - rather than different amounts for low, medium and high scores.

Expenditure - updated Office for National Statistics (ONS) data that we use to verify your clients' stated expenditure.

Affordability Calculator - updated version is now available on our website.

Additional changes to our Affordability Calculator include:

Part and Part - new input for interest only amount if repayment type selected is part and part, so we can confirm an accurate loan amount for these applications.

Maternity/Parental leave - new evidence requirements outputs on summary step 4.

Existing Santander Mortgage Customers - new output in Introducer Internet section in step 4 to identify where you need to input details of your client's existing Santander mortgage to ensure an accurate lending decision is made.

Foreign nationals

We will no longer accept foreign national applicants who do not have indefinite rights to reside in the UK where:

The LTV is more than 75%; and

We are relying on their income to support affordability.

Unacceptable property types

The following properties will no longer be acceptable security for mortgage purposes:

Live/work units

Land with more than 10 acres

Flexible Offset

For new Flexible Offset mortgage applications submitted on or after 25 July 2014, drawdowns from available funds may be assessed for affordability and may only be allowed on a Capital and Interest basis.

To reflect this change we have updated our Flexible Offset mortgage product code to P450C. This change is effective from 25 July and there are no changes to the rate or fee:

75% LTV, Flexible Offset 3.19% lifetime variable (BBR+2.69%) with a GBP495 booking fee - product code P450C

A new Mortgage Rate Bulletin (Issue 14) with the updated product code is now available on our website.

Our Residential Lending Criteria and Evidence Requirements Guide have been updated to reflect these residential lending policy changes.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: ENP Newswire

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