Below is an update from Together, the Bridging and Commercial Mortgage lender, that you can access via our bridging and commercial mortgage team. Contact our team today for more information or click here to view their product cards.
Announcement
Changes to Lending Standards
Please be aware of the changes for any new case submissions.
Independent Legal Advice
- The minimum value for a loan that requires ILA has been raised from £300k to £500k
- The only exception to this is for customers who take out a Home Owner Business Loan, whose minimum boundary will be £200k (this is to reflect the number of issues seen in the past for this product and its elevated risk)
The requirement for ILA when dealing with Limited Companies has been removed (unless an individual is involved within the deal, i.e. providing a guarantee or a security)
Holiday Lets
- ICR thresholds (125% and 145%) introduced to assess affordability, alongside the existing TSDI of up to 50%
- Rather than a straight 50% cap on rental income, can be as high as 80% where sufficient rental income evidence exists.
The rental income allowed to be utilised within the affordability assessment is detailed within the pack
Ground Rent / Service Charges
- The wording in the Lending Standards has been expanded to cover both the acceptable level of current ground rent / service charge, as well as any escalation mechanism
Whilst this change is not yet operational due to required system changes, a calculator has been created for reference with the exact process to be defined by the respective underwriting teams.