If there are second homes or Buy to Let properties in the background, whether that borrowing is with Scottish Widows Bank and/or another lender, full details of the lender, outstanding loan amount(s), rental income and property value(s) must be disclosed.
We will consider each case individually.
To ensure we maintain appropriate limits to the amount of borrowing held by individual customers or connected groups of customers, the following criteria applies:
Mortgage repayments on Buy to Let properties in the background aren't taken into consideration in the affordability assessment provided they're sufficiently covered by the rental income.
To ensure we continue to lend responsibly, rental income from Buy to Let properties must be evidenced. We accept the following as proof of rental income:
An initial occupancy/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 and includes converted and refurbished properties. These will fall into one of the following categories:
Maximum LTV on new build properties (houses and flats) is 80% (75% for 'second home' loans).
All lending decisions are based on valuation or purchase price (whichever is lower).
Some builders offer cash incentives, these may include but are not limited to: deposit contributions, cash-backs, contributions to legal fees and stamp duty, moving costs, mortgage subsidies.
It’s important the valuer is made aware of any incentives as these will be taken into account when determining the value of the property.
Cash Incentives up to 5% of the property value are acceptable provided:
A personal loan is not an acceptable form of deposit.
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.
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Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.
Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.
HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.
Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.