The following strict guidelines, to which there are no exceptions, have been developed with the Underwriting Team – individual cases do not need to be discussed with them prior to application:
Structure
- There must be 2 borrowers and 1 owner. All owners must be party to the mortgage.
- We cannot lend where there are more owners than borrowers.
- Borrowers must be family members.
- No 3 or 4 party applications are allowed.
Credit Criteria
- Maximum LTV 95% (over 90% FTB eligibility applies of course).
- Residential purchase or like for like remortgage only. Not available for BTL and not available for capital raising.
- Interest only using a standard repayment strategy is acceptable as long as the total LTV does not exceed 50% and the loan does not exceed £1m. Repayment strategies which are held jointly with non-borrowers are not acceptable. If any amount is on interest only, the mortgage must finish before the sooner of the anticipated retirement age of the eldest applicant or age 70.
- Background liabilities of all borrowers will be considered for affordability.
Process
- These cases do not qualify for the usual remortgage free legals through Optima Legal and in addition Optima cannot support these transactions on a separate representation basis. The legal representative used must be on our approved legal panel.
- The broker must clearly declare within the additional information section of the application form that this is a Joint Borrower, Sole Owner case and confirm who the sole owner is.
- We do not as standard require Independent Legal Advice be taken in relation to this transaction type, however it should be made clear to brokers that if they have even the slightest suspicion that one party is exerting undue influence over another, that both the Bank and the legal representative are made aware.
Examples
Considered:
e.g. 1 – Owner Mr Jones, Borrowers Mr & Mrs Jones
Not allowable:
e.g. 1 – Owner Mr & Mrs Jones, Borrowers Mr Jones
e.g. 2 – Owner Mr Jones, Borrowers Mr & Mrs Jones & Mr Smith
