Mortgage lending criteria | Metro Bank (2022)

Intermediaries home Lending criteria

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Personal details

Min age

18 – for Residential; 21 for Buy to Let.

Max age

Residential - 80 years old at the end of term, standard affordability assessment.

  • Borrowers who are over 80 years old at the end of the term will be considered on an individual basis

Buy to Let – 85 years old at the end of term, standard affordability assessment.

Lending into retirement

If the applicant is already retired or retiring during the mortgage term, the following is required:

  • Detailed assessment of how the applicant will repay the mortgage in retirement e.g. from a company/private pension.
  • Documentary evidence to demonstrate the retirement income.
Address history

All applicants must have been in the UK for the last 3 years.

Ex-pat

Not accepted.

First Time Buyer

Defined as an applicant who has never owned a residential property in the UK. On joint applications, this applies to all applicants.

Guarantor

Not accepted, can consider joint borrower/sole proprietor for both Residential and Buy to Let applications.

Joint Borrower/Sole Proprietor

Accepted, only where the additional borrower(s) are close and immediate family members.

The definition of close and immediate family includes spouses, parents, grandparents, children, grandchildren, siblings and mother/ father/ brother/ sister/ son/ daughter in law.

Adopted, half, and step members are also included in the definition. Independent Legal Advice required for all parties. On a Residential mortgage the Joint Borrower cannot reside in the property. Joint Borrower/Sole Proprietor is not available for capital raising unless for the benefit of all parties.

Maximum of 2 households only (including the security property household on completion). 2 households needs to be selected as part of the application and expenses from both households need to be included.

Islamic Mortgages

Not accepted.

Number of Applicants

Maximum of four applicants. For Residential mortgages for more than 2 applicants, the additional applicants must meet the close and immediate family definition.

The definition of close and immediate family includes spouses, parents, grandparents, children, grandchildren, siblings and mother/ father/ brother/ sister/ son/ daughter in law.

Adopted, half, and step members are also included in the definition. For Professional Mortgage Range applications, we accept a maximum of 2 applicants that both reside/will reside in the subject property.

For Buy to Let mortgages, a maximum of 4 applicants (unrelated applicants accepted).

Visa

Must supply 3 years UK address history and currently be resident in the UK. All applicants must have either settled or pre-settled status unless they are Irish citizens or have indefinite leave to remain/enter the UK. Tier 2 Visas considered (Maximum LTV 75%), minimum income £75,000, Capital and Interest loans only. Proof of Sponsorship required

2nd Mortgage - Aggregated Debt Affordability

Affordability calculation needs to cover both mortgage balances.

Employment/income details

Time in Employment/Probation Period

For employed applicants, the minimum time in current employment is 3 months unless there is a strong track record in the same line of work, with a minimum time in continuous employment of 12 months. Income level should be sustainable.

Probationary period acceptable subject to conditions, dependent on career history.

Variable Income - Bonus/Commission/Overtime

We use 60% of cash bonus/commission/overtime from the latest/current year.

We will use either

  • The latest P60 minus the basic and fixed allowances
  • Or the basic and fixed allowances year to date
  • Or the Bonus payslip for the current year supported by the year to date figure.
Shift Allowance

Accepted at 100% of the fixed regular amount if contracted as permanent.

Car Allowance

Accepted at 100% of the fixed regular amount

Rental Allowance

Not accepted.

Large Town Allowance

Accepted at 100% of the fixed regular amount

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Second Job

Accepted – 100% of basic and fixed acceptable allowances if 12 month track record and sustainable. P60 for this employment will be required to evidence earnings in addition to last 3 payslips.

Bursary Income

Not accepted.

Foster Income

Not accepted.

Private Pension

SIPP Income - Accepted at 5% of the fund value, over a maximum term of 20 years, this can be considered even if not currently being drawn if the customer is over age 55. If fund contains a property the value of the property will be excluded. A Current Annual Investment Portfolio Report will be required.

SSAS Income - Accepted, at 5% of the fund value, over a maximum term of 20 years, this can be considered even if not currently being drawn if the customer is over age 55. Refer for additional requirements. Typically Accounts and Investment Portfolio Reports are required.

Investment Income

Accepted at 5% of fund value over a maximum term of 20 years - subject to a minimum managed portfolio value of £250,000. Single stock or funds with individual properties will be excluded.

Rental Income

Accepted, 100% of latest year. The useable income is calculated as profit from land and property after removing any dis-allowable expenses - such as finance costs. To be evidenced via most recent SA100 (submitted tax return) with Inland Revenue (IR) mark paired with the tax year overview. Where the disallowed expenses/finance costs section (Box 40 minus Box 44 of rental section on SA100) is blank the BTL mortgage payment should be added as a commitment.

Lodger’s income not accepted.

Maintenance Income Court Order

Accepted, if guaranteed for the life of mortgage.

Maintenance Income No Court Order
Trust Income

Accepted, must be guaranteed for term of mortgage, refer for additional requirements. Trust documents will be required, including evidence of trust assets - typically Trust Accounts and Investment Portfolio Reports.

Benefits Child Tax Credit

Not accepted.

Benefits Work Tax Credit

Not accepted.

Benefits Child Benefit

Not accepted.

Benefits DLA/PIP For Self

Accepted if granted for life.

Benefits DLA/PIP for dependant

Not accepted.

State Pension

Accepted.

Self-Employed

Classed as self-employed if own 25% or more of business this includes PAYE Directors that hold 25% or more.

3 months business bank statements are required on all self-employed cases to confirm the sustainability of the business.

Partnerships

Accepted. Treated as self-employed.

Sole trader

Minimum of 3 years SA100 (tax returns) with Inland Revenue mark required. Where the return is submitted by an accountant, the calculation or computation and tax year overview can be accepted and will need to be supported by a covering letter on headed paper from the accountant (see accountant qualification section) confirming the attached figures have been submitted to HMRC.

Directors of Ltd Company

Director’s remuneration plus average dividend for last 2 years is used for affordability where the ongoing sustainability of drawings can be evidenced.

Profit before taxation averaged over last 2 years plus directors remuneration can be considered for affordability if 100% of shareholders are on the mortgage and sustainability of the business can be confirmed.

2 years full company accounts submitted and registered with Companies House required to support application. Minimum of 3 years SA100 (tax returns) with Inland Revenue mark required. Where the return is submitted by an accountant, the calculation or computation and tax year overview can be accepted and will need to be supported by a covering letter on headed paper from the accountant (see accountant qualification section) confirming the attached figures have been submitted to HMRC.

Accountant Qualifications

Main accountants’ qualifications accepted.

- Institute of Chartered Accountants England & Wales

- Institute of Chartered Accountants Scotland

- Chartered Institute of Management Accountants

- Association of Chartered Certified Accountants

- Chartered Institute of Public Finance and Accountancy

- Institute of Financial Accountants

-Association of Accounting Technicians

Contractors - Self Employed/Temporary/Fixed Term

Accepted. Minimum 3 month current contract and history of contracts of at least 12 months required with no more than 6 weeks of gaps in contracts. Contracts must have a start and end date. If current contract is nearing its end we may require evidence that it has been renewed. Income calculated as a daily rate over a maximum of 46 weeks based on 5 day working week (unless the contract restricts the applicant to less than this). We require evidence of the current contract, 12 months contract history and 3 months Bank statements showing receipt of contract income at level keyed. A 12 month history is not required for applicants who can evidence 24 months continuous history working within the same industry as evidenced by P60’s.

Temporary and fixed contract accepted where income can be evidenced over a 24 month period in the same industry. Income will be assessed as guaranteed income (hourly/ daily rate multiplied by guaranteed hours/ days). We require evidence of current contract, 12 months contract history and 3 months Bank statements showing receipt of contract income at level keyed. Where applicant does not have a 12 month contract history please provide last 2 P60s showing continuous employment in the same industry.

Zero Hour Contracts

Not accepted. This includes contracts without an end date or conformation of hours to be worked.

Professionals

This product is for fully qualified, registered and practicing Solicitors, Barristers, Medical Doctors, Accountants, Actuaries, Vets, Dentists, Surveyors, Architects and Engineers for purchase or remortgage applications. Capital raising is accepted.

  • We can offer enhanced income multiples (normally we offer 4.45 times the customer’s income but for the professional mortgage we can offer 5.5 times their income - subject to affordability)
  • The customer must be over 21 years of age
  • Applicants accessing this range due to being from an accepted profession must have qualified in the last ten years and be registered with the appropriate UK professional body. They must also work in the field related to their profession
  • We will consider professional applications for up to two applicants only, at least one applicant must meet our professional criteria. Applications may be considered where a ‘non-professional’ has the highest income and subject to full case review
  • Joint borrower, sole proprietor not accepted and available on prime residence only
Income Multiples

All income multiples are 4.49x unless stated below:

House Purchase/Re-mortgage Ranges

House Purchase/Re-mortgage Ranges

Large Loan Range

Professional Range

Loan to Income Multiplier

4.5x

4.5x

4.5x

5.5x

1 Applicant

£70,000 minimum income

£100,000 minimum income

No minimum income

Must meet Professional criteria

2 Applicants

3 Applicants

£100,000 minimum income

£150,000 minimum income

4 Applicants

Max LTV

85%

85%

80%

90%

Umbrella companies

Accepted - classed as contractors. Refer for assessment.

Supply Teachers

Only if long term track record – average of last three years’ earnings.

Parental Leave (including Adoption Leave)

Return to work salary as evidence by employer letter and the last payslip before leave, providing there is sufficient income/savings to cover any reduction in income during leave period. Employer’s letter needs to confirm return to work date, income, hours and no change in terms and conditions of employment. Last payslip before leave is also required.

Other income sources should be evidenced alongside savings that may supplement any income loss during this leave. We may request additional information or documentation to support this.

Foreign Currency

Income or Assets generated or held in a currency other than (£) sterling are not accepted for the purpose of Affordability or Repayment Strategy.

Existing mortgage/debts details

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Buy to Lets in Background

Need to demonstrate that any Buy to Lets are self-financing (the rental exceeds the mortgage payment), One months' bank statements required to show rental and mortgage payments.

Let To Buy (Buy to Let Mortgage)

Accepted, completion will need to be simultaneous with onward residential purchase.

Let To Buy (Existing Resi Mortgage)

Where a client applies for a residential purchase mortgage but will be letting their old residence out (rather than selling), the old main residence mortgage will be ignored if an ARLA letter shows rent will cover the mortgage repayments once the client moves out. If a new mortgage is being taken out on the property, a Mortgage Illustration will need to be provided and the rental need to cover the new mortgage payment. Evidence of consent to let may be requested when existing mortgage is being retained on residential terms.

Consent to Let

Evidence of consent to let maybe requested when existing mortgage is being retained on residential.

Porting

Accepted, refer for details.

Non Simultaneous Sale & Completion

Treated as running 2 houses and affordability calculation will take into account both mortgage (if applicable).

Other Debts

Any debts remaining on completion are included in expenditure as part of the affordability calculation, including credit card balances at 3% are included in the affordability calculation. Any debts with less than 3 months to run can be ignored, this will need to be evidenced.

Childcare and School Fees

Taken as commitment.

Property details/purpose

Location of Lending

Mainland England, Wales and Scotland.

For Scotland we will not lend in the following postcodes:

  • Western Isles (HS)
  • Highlands (KW & ZE)

A Standard Mortgage Valuation will be required in all cases.

Minimum property value/ purchase price

£75,000 for both Residential and Buy to Let properties.

Agricultural Ties
Annexe/Granny Flat

Accepted, if used by own family/dependant relative.

Bed & Breakfast

Not accepted.

Commercial property close by

Accepted - subject to surveyor’s comments that the property and location does not adversely affect saleability.

Construction Timber Framed

Accepted, with durable outer leaf, subject to surveyors comments on marketability andthe suitability of the security for mortgage lending.

Construction All Timber

Not accepted.

Thatched Roof

Accepted, subject to surveyor's comments. A note should be added at application to confirm the property has a thatched roof.

Construction Steel Framed

Accepted, subject to a satisfactory structural engineer’s report and surveyors comments on marketability andthe suitability of the security for mortgage lending.

Construction PRC

Not accepted.

Construction Single Skin

Not accepted.

Japanese Knotweed

Category 1 - Acceptable. Japanese Knotweed was not seen on this property, but it can be seen on a neighbouring property or land where it was more than 7 metres away from the boundary.

Category 2 - Acceptable. Japanese Knotweed was not seen within the boundaries of this property, but it was seen on a neighbouring property or land. It was within 7 metres of the boundary, but more than 7 metres away from habitable spaces, conservatory and/or garage of the subject property.

Category 3 and Category 4 - Unacceptable unless appropriate treatment plan provided by a company affiliated to either the Property Care Association Invasive Weed Group or the Invasive Non-Native Species Association (INNSA) in place. The treatment plan must be paid for in full prior to Metro Bank releasing funds and benefit from a 5 year warranty/ insurance backed guarantee.

Non Habitable Condition

Not accepted - property has to be secure; structurally sound; insurable; have a working kitchen with running water, storage and ability to heat food; have a working bathroom with working lavatory, sink and ability to shower or bath.

Ex Local Authority

Houses accepted. Flats accepted subject to a maximum number of stories in the block of 6. Deck access accepted subject to surveyor's comments. A note should be added at application to confirm the property is ex local authority and/or has deck access.

Flat Max Floors

No Maximum. Above 4 Stories requires a lift.

Holiday Lets

Not accepted.

AirBnB

Accepted on Residential mortgages for up to 90 days per annum.

2 Kitchens

Accepted, if in Granny annex (see above), otherwise not accepted.

Leasehold

Minimum 50 years unexpired term on lease at end of mortgage term, subject to valuers comments. Escalating Ground rents

  • New builds/conversions must have an initial minimum lease term of 125 years;
  • The maximum initial ground rent should initially be no more than 0.25% of market value;
  • The ground rent must not be reviewed less than every 10 years;
  • The ground rent must only be reviewed in line with the RPI or equivalent;
  • Event fees can only be based on the reasonable administration costs incurred.
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Listed Buildings

Grade I, II* and II (A, B and C in Scotland) accepted - subject to full valuation and surveyor’s comments.

Live/Work Units

Not accepted.

Modern Methods of Construction

Accepted - subject to:

  • Planning and building regulation compliance.
  • An acceptable building standards warranty scheme being available.
  • Buildings insurance being obtainable under normal terms.
  • A minimum design life of 60 years as confirmed by a British accredited body (i.e. BRE, BOPAS).
  • Saleability confirmed by the surveyor
  • Being situated in a suitable location as defined by the surveyor
New Build definition

Property built/converted in last 12 months (based on completion certificate) and being occupied for the first time.

New Build warranties/guarantees

Properties that have been built or converted in the last 10 years require suitable warranties/guarantees to be in place. A list of which is available on the UK Finance website www.ukfinance.org.uk.

New Build house

90% LTV for Residential, 80% LTV for Buy to Let.

New Build flat

90% LTV for Residential, 80% LTV for Buy to Let.

New Build Incentives

Builder Incentives accepted up to 5% of the purchase price. Builder incentive can include builders gifted deposit, white goods, carpets and curtains, cashback, legal fees and a contribution towards stamp duty.

Recently purchased property

Remortgages of recently purchased properties will only be accepted if 6 months has elapsed since completion of purchase.

Restrictive Covenants

Not accepted.

Self Build

Not accepted, unless completed and covered by a suitable structural new build warranty.

Solar Panels

Accepted, providing no lease agreement exists.

Studio

Accepted for residential, not accepted for BTL.

Floor Area

Minimum Gross External Area (GEA) of 35m2

Valuation fee scale

See product guide.

Right To Buy

Not accepted.

HomeBuy Direct/Shared Equity

Not accepted.

Shared Ownership

Not accepted.

Help to Buy

Not accepted.

Armed Forces Help to Buy

Accepted.

Key Worker scheme

Not accepted.

Property owned in Trust

Not accepted.

2nd Property for Personal Use

Accepted if for own use (max 85% LTV). We will accept up to 75% LTV on Interest Only (with sale of property as a repayment strategy) with an additional 10% on capital repayment.

Affordability calculation needs to cover both mortgage balances.

For interest only applications where the sale of the security is the repayment strategy the minimum property value requirement does not apply (see Acceptable Repayment Strategy section). If for a Dependent Relative please refer to the specific section).

2nd Property for Dependent Relative

Accepted if for dependant relatives use (max 85% LTV). We will accept up to 75% LTV on Interest Only (sale of property is not suitable as a repayment strategy) with an additional 10% on capital repayment (see Acceptable Repayment Strategy section).

Affordability calculation needs to cover both mortgage balances.

Loan details

Min Term

5 years.

Max Term

40 years for Residential mortgages on Capital and Interest Repayment.

35 years for BTL mortgages and Residential mortgages on Interest Only/Part & Part Repayment.

Min Loan

£50,000. Additional borrowing applications have a £500 minimum loan amount.

Max Loan

Loans considered up to any level (max interest only 75% on Residential mortgages and 80% on Buy to Let mortgages).

Lending over 85% LTV

Customers with impaired credit history, as per the PRA definition, are not accepted over 85% LTV.

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Max Loan by LTV Residential

Max loan to value

Loan amount

95%

Up to £675,000

90%

Up to £675,000

85%

Up to £1,000,000

80%

Up to £2,000,000

75%

Up to £2,500,000

70%

Up to £5,000,000

65%

Over £10,000,000

60%

Over £10,000,000

50%

Over £10,000,000

Max Loan by LTV Buy to Let
Max loan to valueLoan amount
80%Up to £500,000
75%Up to £2,000,000
70%Up to £2,500,000
65%Up to £3,000,000
60%Up to £10,000,000
50%Over £10,000,000
Deposit

Deposit must be from own resources unless gifted by a close family relative for both Residential and Buy to Let applications. The definition of close and immediate family includes spouses, parents, grandparents, children, grandchildren, siblings and mother/ father/ brother/ sister/ son/ daughter in law. Where deposit is gifted, the donor must complete the Gifted Mortgage Deposit Form to confirm a sum of money is being gifted towards a deposit on a property. Additional evidence of funds may be requested.

Part & Part

Accepted, subject to interest only policy. Maximum LTV 85%.

Interest Only for Residential Applications
  • Minimum usable income of £50,000 required.
  • There must be a clear and believable means of capital repayment.
  • We require suitable evidence of the repayment strategy.
  • Part Interest Only and Part Capital Repayment is permitted.
  • Maximum LTV is 75%.

The following will not be accepted as suitable repayment strategies:

  • Sale of property (unless meets criteria below, see acceptable repayment strategies).
  • Previous record of reducing debt.
  • Future potential income.
  • New investments (including those that have been in place for less than 12 months).
  • Inheritance.
  • Bonuses.
  • Future conversion to a Capital and Interest mortgage.
  • Any strategy that relies on increasing house prices.
  • Sale of business.
Acceptable repayment strategies (please note all repayment strategies must be held in GBP)
  • Endowment (evidence of current value to be provided)
  • Stocks & Shares ISA (evidence of current value to be provided)
  • Unit Trusts / OEICs (evidence of current value to be provided)
  • UK Stocks & Shares (evidence of current value to be provided)
  • Savings (evidence of current value to be provided and must have been in place over 12 months)
  • Premium Bonds (evidence of current value to be provided)
  • Sale of investment property(ies) – equity must be equal to 120% of the interest only amount.
  • Sale of existing liquid investments (evidence of current value to be provided).
  • 25% of current pension value (evidence to be provided). Refer SIPPS
  • Downsizing up to 50% LTV and up to a further 25% LTV through a credible repayment strategy (see above) or capital & interest repayment.
  • Total allowable on Interest Only 75%.
  • Part Interest Only and Part Capital Repayment is permitted.
  • Minimum property value £600,000
Debt Consolidation

Maximum LTV - 80%

Interest only - accepted

Part & Part - accepted

Capital raising
  • Limited to 90% LTV for Residential and 80% LTV for Buy to Let
  • Purpose of capital raising required; evidence may be requested
  • Funds will be held on retention for a maximum of 6 months (until required and satisfactory evidence provided)
  • Not available for speculative investment or business/commercial use
  • Unencumbered properties are treated as remortgages. Refer to product guide for pricing
  • Capital raising must be for the benefit of all parties to the mortgage
  • Debt Consolidation limited to 80% LTV.

Offers valid for

Offers are valid for 5 months, new build offers are valid for 9 months.

Credit history

CategoryAccepted?Accept Criteria
CCJsSatisfied

Y

Up to £1,000 are accepted in the last 36 months
UnsatisfiedYUp to £500 are accepted
ArrearsSecuredYUp to 2 months arrears in last 24 months
UnsecuredYUp to 2 months arrears in last 24 months
MortgagesYUp to 2 months arrears in last 24 months
OtherYUp to 2 months arrears in last 24 months
BankruptcyYMust be discharged and >3 years must have passed since bankruptcy order
DefaultsSatisfiedYUp to £1000 accepted in the last 36 months. If registered in the last 24 months, acceptance is subject to a maximum of 2 missed payments leading to default
Unsatisfied

Y

Y- Near Prime Range Only

Up to £500 are accepted. If registered in the last 24 months, acceptance is subject to a maximum of 2 missed payments leading to default.

Up to £1,000 are accepted. If registered in the last 24 months, acceptance is subject to a maximum of 2 missed payments leading to default.

IVAsSatisfiedYAny satisfied IVA
UnsatisfiedNNot Accepted
Protected Trust Deed (Scotland)SatisfiedYAny satisfied Protected Trust Deed
UnsatisfiedNNot Accepted
Debt Management Plan/Debt Relief OrderCurrentNNot Accepted
Debt Management Plan/Debt Relief OrderCompletedYAccepted if Debt Management Plan/Debt Relief Order completed

Notes

Acceptance is subject to passing the Scorecards and no evidence of the following:

  • Payday Lending
  • Reliance on Cash Advances from unsecured facilities
  • Declined payments

Customers with impaired credit history, as per the PRA definition, are not accepted over 85% LTV.

Credit check/score

Credit search and score obtained.

Credit Reference Agency

Buy to let

Acceptable repayment strategies
  • Sale of mortgaged property
  • Part Interest Only and Part Capital Repayment is permitted
  • Total allowable on Interest Only 80%.
Rental Calculation

Product/Criteria

Loan to Value

Stress Rate

2 year fixed

to 75%

140% of the mortgage interest amount calculated at a stress rate of 7.5%, earned income can be considered. Conditions apply

5 year fixed

to 80%

140% of the mortgage interest amount calculated at a stress rate of 7.5%

Use of Earned Income (Top-slicing)

to 75%

100% of the mortgage interest amount calculated at a stress rate of 7.5% is required to support the subject property and/or the background portfolio. Conditions apply.

Top Slicing

Earned income from up to 2 applicants can be considered to support buy to let applications where the rental income is equal to, or greater than, 100% cover of the mortgage interest amount calculated at Metro Bank’s 7.5% stress rate and the customer(s) have a minimum income of £50,000 for a single application, or £75,000 for a joint application. (Income from rent is not permitted to support top-slicing).

You are required to complete a budget planner and upload it at AIP stage, we then use this to ensure the disposable income exceeds the rental shortfall of the property or portfolio.

Owner-occupier

Minimum of one applicant must be an owner-occupier. First time landlords accepted (exceptions considered if in work related accommodation). For Joint Borrower/Sole Proprietor the person on the title must be owner occupier or have other BTL. Experienced landlords can be considered.

Joint Borrower/Sole Proprietor

Accepted, only where the additional borrower(s) are close and immediate family members. The definition of close and immediate family includes spouses, parents, grandparents, children, grandchildren, siblings and mother/father/brother/sister/son/daughter in law. Adopted, half, and step members are also included in the definition. Independent Legal Advice required for all parties. For Joint Borrower/Sole Proprietor, the person on the title must be owner occupier or have other BTL(s).

Income

No minimum income required, (unless using top slicing, see section above), one applicant must be earning an income other than rental.An assessment of funding living expenses and rental voids will be made.

Portfolio size

Maximum of 3 mortgaged Buy to Let properties in total or 10 with no more than £5m of Metro Bank exposure, whichever binds first. These limits also apply for existing customers seeking a further advance.

Properties

Max 80% LTV for both houses and flats.

Tenancy

Single AST (or Short Assured Tenancy/Private Residential Tenancy in Scotland) required of no more than 36 months which must contain an annual break clause) and be regulated by the Housing Act 1988. Single household only - Multiple tenancies not accepted. Other forms of tenancy are not acceptable, for example Common Law Tenancies, typically used when letting to a company, where the annual rent is more than £100,000 or where the landlord is a resident.

Tenants

Maximum of 5 individuals forming a single household. Family member, corporate, housing associations, HMOs, student lets, holiday lets and individuals with diplomatic immunity are not accepted.

Rental income

Proof required via 1 month bank statement. Rent received in cash is not accepted. Income from rent is not permitted to support top-slicing.

Consent to Let

Considered upon request. Mortgage must have been with Metro Bank for a minimum of 12 months.

Consumer Buy to Let

We class a Consumer Buy to Let mortgage as an application where all applicants do not own other Buy to Let properties and since becoming the owner of the proposed security property the customer or their family members have lived in the property (e.g. the customer is completing a Let to Buy transaction or has inherited a property and resided in it prior to letting it out).

Portfolio Buy to Let

Not accepted.

This is classed as any Buy to Let application where the applicants will own either in sole name or jointly, the sum of 4 or more Buy to Let properties with mortgages on completion, this includes any Buy to Let properties owned in Limited Companies.

Energy Performance Certificate

Required confirming that an energy performance indicator of no less than E is in place (applicable to properties located in England & Wales only).

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FAQs

What is the eligibility criteria for a mortgage? ›

Your ability to get a mortgage depends on a number of things, including the amount you're looking to borrow, the size of your deposit and your credit score. Some other things to consider include: your employment status and income. your expenses.

Do mortgage lenders have different criteria? ›

Mortgage lenders have their own set criteria when deciding whether or not to lend to you. This means that if one lender rejects you, another might not. However, it's best not to make too many applications at the same time.

What is the criteria for a mortgage in the UK? ›

They will look at lots of factors to decide whether you are eligible for a mortgage. These include your finances, any debts, your credit history, how much you earn and how much you spend. It's not good for the lender or the borrower if a mortgage is given to someone who can't afford it.

How many times my wages can I borrow for a mortgage? ›

If you've ever looked for a mortgage, you might have noticed a recurring theme. Most lenders will lend 4.5 times an annual salary whether you're employed, a freelancer, contractor or limited company director.

What are mortgage rules? ›

The rule says that no more than 28% of your gross monthly income should go toward housing expenses, while no more than 36% should go toward debt payments, including housing. Some mortgage lenders allow a higher debt-to-income ratio. Lowering your credit card debt is one way to lower your overall DTI.

What is the 6 month rule with mortgages? ›

The 6 month mortgage rule is an area of lending criteria imposed by the CML (Council of Mortgage Lenders) with the intention of stopping you from remortgaging a property within 6 months of purchase. The 6 month mortgage rule also applies to purchases of a property that the vendor has owned for less than 6 months.

Do you need 3 months payslips to get a mortgage? ›

You'll need to provide the last 3 months of bank statements showing the payment being received.

Can I get a 25 year mortgage at 40? ›

As a result borrowers can take out a 25-year mortgage regardless of their age at the time they apply for a mortgage. But while your age isn't a barrier to getting a mortgage, whether it will be affordable both before and into retirement is.

How hard is it to get a mortgage UK? ›

You can purchase with as little as 5% deposit, and the government will give you an additional 20% as an equity loan to put down a 25% deposit on a property, so it may be easy to get a Help to Buy loan.

What mortgage can I get on 40k salary? ›

With a salary of 40k, it means you can afford a mortgage that is 2x to 3x your gross income. Additionally, you'll need to have a certain level of surety in understanding your monthly mortgage payments. While your income and regular monthly expenses may be moderately stable, emergency expenses can affect your savings.

Which bank gives 5 times salary mortgage? ›

Nationwide Building Society is now offering mortgages worth 5.5 times salary to those with just a 5 per cent deposit, it has announced.

Is a mortgage 4 or 5 times your salary? ›

4-4.5 times your salary is the average income multiple used by most high street lenders, so is often quoted as the amount you can expect to borrow. It's only an average though, and it is possible to secure a mortgage for 5 times or even 6 times your annual salary, depending on your circumstances and on the lender.

How do banks check your income? ›

Lenders May Ask for Income Information

They typically ask about your income on credit applications and may require proof, in the form of a pay stub or tax return, before finalizing lending decisions. Sometimes creditors ask for proof of employment and the name of your employer on credit application as well.

How do they calculate mortgage approval? ›

How Do Lenders Determine Mortgage Loan Amounts?
  1. Gross Income. This is the level of income a prospective homebuyer makes before taking out taxes and other obligations. ...
  2. Front-End Ratio. ...
  3. Back-End Ratio. ...
  4. Your Credit Score. ...
  5. Income. ...
  6. Expenses. ...
  7. Lifestyle. ...
  8. Personality.

How do mortgage lenders verify income? ›

To verify your income, your mortgage lender will likely require a couple of recent paycheck stubs (or their electronic equivalent) and your most recent W-2 form. In some cases the lender may request a proof of income letter from your employer, particularly if you recently changed jobs.

What are two types of mortgages? ›

Mortgages are available with two different types of interest rates: fixed and adjustable.
  • On a fixed-rate loan, the interest rate stays the same for the entire life in the loan. ...
  • On an adjustable-rate loan, the interest rate varies along with the broader financial market.
22 Jul 2022

What is compliance in mortgage? ›

Mortgage compliance is the industry's general term that refers to the rules and regulations that control the mortgage process. Not only is following mortgage compliance legally required, it's also a key to being a successful loan originator.

Who makes the mortgage rules? ›

Congress created the CFPB to make sure financial markets work for consumers and one way we do this is by writing rules for mortgages and other consumer financial products.

Can you change property after mortgage offer? ›

Thankfully, most lenders will happily transfer your mortgage offer to a new property. They'll just require a survey on it first, and may ask for up-to-date payslips and bank statements if some time has passed since their original offer.

Can I buy a house and then sell it right away? ›

You can sell anytime, but it's smart to wait at least two years before selling. By living in your home for at least two years, you can exclude up to $250,000 (or $500,000 if you're married) of the profits of the sale from your taxes, thanks to the Two Year Ownership and Use Rule.

What is the 6 month rule? ›

Six Month Club Requirements:

As a general rule, passports must be valid for six months beyond the date the traveler will exit the United States. However, the United States has signed agreements with a number of countries to waive this requirement.

Do mortgage lenders check all bank accounts? ›

Yes, a mortgage lender will look at any depository accounts on your bank statements — including checking accounts, savings accounts, and any open lines of credit.

How many years of bank statements do I need for a mortgage? ›

Typically, you'll need to provide 2 months' of your most recent statements for any account you plan to use to help you qualify. If the account doesn't send monthly reports, you'll use the most recent quarterly statement.

Can I get a mortgage if I just started a new job? ›

You can get a mortgage even if you're just starting your career: You don't always need years and years of work experience in order to get a home loan approved. Sometimes, a lender will approve you on the strength of a job offer alone; especially for high-earning positions like physicians and lawyers.

What age is best to buy a house? ›

There is an ideal age to buy your first home, and that's between the ages of 25 to 34. As you enter your golden years and (hopefully) retirement, the equity in your home will become even more important to your financial health, especially should you need to refinance to cover any gaps in your retirement savings.

Can a 70 year old get a 30-year mortgage? ›

A standard rule of thumb applies, regardless of age: So long as your mortgage payments are no more than 45 percent of your gross income, you should be able to get the mortgage.

Is 35 too old to buy a house? ›

There is no upper age limit on buying a house, but should you need to borrow, the terms of your mortgage will need to consider your personal and financial circumstances and are subject to differing criteria.

How much debt is too much for a mortgage? ›

Debt-to-income ratio targets

Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high. The biggest piece of your DTI ratio pie is bound to be your monthly mortgage payment.

Can mortgage be declined after offer? ›

But it doesn't guarantee you a mortgage, and it is possible to be refused by a mortgage provider after they've given you an agreement in principle. If this happens, it's often because the lender found something that didn't meet their criteria when they did a full search of your information.

What should my credit score be to get a mortgage? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable rate mortgages (ARMs).

Can I get a 25 year mortgage at 40? ›

As a result borrowers can take out a 25-year mortgage regardless of their age at the time they apply for a mortgage. But while your age isn't a barrier to getting a mortgage, whether it will be affordable both before and into retirement is.

How long do you need to be employed to get a mortgage UK? ›

Read on to find out more… The standard position for the UK mortgage lenders is 3 months or 6 months in your current position.

Can I get a mortgage at 65 years of age? ›

Plenty of lenders are happy to offer standard lending terms and competitive rates for borrowers up to age 60. Many lenders impose an age cap at 65 - 70, but will allow the mortgage to continue into retirement if affordability is sufficient.

Can I get a mortgage if I just started a new job? ›

You can get a mortgage even if you're just starting your career: You don't always need years and years of work experience in order to get a home loan approved. Sometimes, a lender will approve you on the strength of a job offer alone; especially for high-earning positions like physicians and lawyers.

What age is best to buy a house? ›

There is an ideal age to buy your first home, and that's between the ages of 25 to 34. As you enter your golden years and (hopefully) retirement, the equity in your home will become even more important to your financial health, especially should you need to refinance to cover any gaps in your retirement savings.

Can a 70 year old get a 30-year mortgage? ›

A standard rule of thumb applies, regardless of age: So long as your mortgage payments are no more than 45 percent of your gross income, you should be able to get the mortgage.

Is 35 too old to buy a house? ›

There is no upper age limit on buying a house, but should you need to borrow, the terms of your mortgage will need to consider your personal and financial circumstances and are subject to differing criteria.

Do you need 3 months payslips to get a mortgage? ›

You'll need to provide the last 3 months of bank statements showing the payment being received.

Can I get a mortgage with 1 year employment? ›

Unfortunately, if you've been working less than 2 years, your income will not qualify you for a mortgage. You'll need to reapply once you can document 2 years of reliable income.

How many bank statements do I need for a mortgage? ›

You'll usually need to provide at least two bank statements. Lenders ask for more than one statement because they want to be sure you haven't taken out a loan or borrowed money from someone to be able to qualify for your home loan.

At what age do banks stop giving mortgages? ›

As long as you are 18 or older, your age won't lower your chances of qualifying for a mortgage loan. Mortgage lenders are not allowed to use age as a reason to deny your request for a mortgage loan, whether you are 60, 70, 80 or 90.

What is the maximum age for a HSBC mortgage? ›

The minimum age for mortgage applicants is 18. Maximum age (of the oldest borrower for joint applications) at the end of the term is as follows: Capital Repayment - the day prior to the 80th birthday. Fully Funded Interest Only - the day prior to the 75th birthday.

Can you be a first time buyer at 50? ›

The majority of buy-to-let lenders have maximum borrower ages at the time of application between 75-80, although a handful of lenders might allow you to reach 85 depending on your circumstances and ability to meet their criteria. Therefore getting a 25-year buy-to-let mortgage may well be possible if you're 50.

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