Mortgage lending criteria

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Find out all about our lending criteria for new clients

You can search our lending criteria - enter the phrase or term you're looking for and click on the search button - or view our printable version.

This section offers you an overview of our lending criteria for new clients. Whilst we aim to cover all relevant information, this criteria does not detail all our requirements and for anything you are unable to find, contact your BDM.

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Application process 

 Decision in principle (DIP)

Our mortgage promise provides a full mortgage credit score facility using minimal information.

It states how much we can lend, is valid for three months and is subject to a valuation and the information supplied being correct.

This is only available for mortgages in the UK.


 Deposits

All customers must make a minimum personal deposit for the property relevant to their individual credit score, product or scheme. No element of this deposit should be represented by a personal loan.

Military personnel - Serving members of HM Forces may be able to raise capital for a deposit by means of a 'Long Service Advance of Pay' (LSAP) which will be repaid by the customer through their pay. This can be accepted as a deposit with the monthly repayment keyed as a commitment.

Family Gift - Gifts from family are acceptable however, we require a letter prior to completion from the family member giving the gift, addressed to Halifax and confirming their relationship to the applicant, the amount of the gift, that it is non repayable and that the person giving the gift will have no interest in the property.

Concessionary – if the deposit is from equity (e.g. a reduced purchase price) the application should be treated as a concessionary purchase – refer to CONCESSIONARY PURCHASE FOR CRITERIA

Vendor Deposits and Cashbacks (Non New Build Properties) - Vendor Gifted Deposits are an unacceptable source of deposit for any non new build property.

This does not impact buyers who are receiving gifted deposits to purchase New Build Properties or concessionary purchases


 Direct Debit details

The details of the client's bank account from where the mortgage will be paid should be keyed directly via Halifax Intermediaries Online.

There is no requirement to complete a Direct Debit mandate form, but details must be provided before the offer will be issued.


 Finder's fees

Applications involving finder's fees are not acceptable.

A finder's fee is a fee or commission paid by a seller to a third party (such as an investment club) for finding or introducing a buyer. It does not include the normal fee or commission payable to any estate agent handling the sale.


 Interest only repayment methods

All loans arranged where the capital element is not included in the monthly payment, including those that are part capital and interest repayment, part interest only, must have a plan in place to repay the capital at the end of the term. This includes new loans, further advances and product transfers.

As a responsible lender, it is important for us to see evidence of the repayment plan for interest only mortgages so documents relating to the repayment plan must be received before a new mortgage offer can be considered.

For further details of shared ownership schemes please select repayment plans

Repayment plans

The table below shows the repayment plans we accept and the evidence required in each case. It also shows the methods we use to assess whether a repayment plan meets our lending criteria. This information is only a guide. A mortgage offer will only be issued once we have confirmed that the evidence supplied meets our criteria.

Repayment plan Evidence required Assessment method

Endowment (UK)


Both with profits and unitised plans.

Copy of latest projection statement dated within last 12 months.

Endowment companies will present three growth rates to a customer with the middle one (for example 6%) being the most likely projected outcome. We allow up to 100% of projected amount using the middle % figure.

Stocks and Shares ISA (UK)


Only UK based investments quoted within the FTSE index held in sterling are acceptable


Unit trusts / Open Ended Investment Companies (UK)


Investment Bonds (UK)

Copy of latest statement dated within last 12 months.

We will compare the value of the ISA/OEIC/Investment Bond with the amount of interest only lending required, taking into account the remaining term of the mortgage and future market volatility.
The valuation we will assign to the investment is 80% of the current value which must be greater than £50000

Stocks and Shares (UK)


Only shares quoted within the FTSE index held in sterling are acceptable

Copy of share certificates, nominee account statement or confirmation from a recognised stock broker containing evidence of share holdings together with their valuation.

See Stocks and Shares ISA.

Pension (UK)

Copy of latest projection statement dated within last 12 months.

For the purposes of backing an interest only mortgage, a maximum of 25% of the current fund value with the current value to be greater than £1 million. Where customers are on a final salary pension scheme the lump sum can be used if it is greater than £250,000. Pensions can be combined to reach the £250,000 and there is no need for confirmation of the full fund value.

Sale of other residential property (UK)


Due to valuation and verification requirements this is restricted to properties within the UK.

Completed interest only - other residential property form and, if the mortgage lender is outside Lloyds Banking Group, a copy of the latest mortgage statement dated within last 12 months.

We will check the ownership of the other residential property and assess its value (Ownership of the other residential property must be in the same name as the applicants). We will compare the equity available in the property with the amount of interest only lending required. Current equity within the property must be over £50,000. We will use 80% of the current equity value of the property to support interest only lending. Please note that there is a minimum greater than £50,000 equity requirement for each individual property being used to support Interest Only lending.

Sale of other Residential Property (not yet purchased) (UK)


Due to valuation and verification requirements this is restricted to properties within the UK.

Property details, Acting Solicitor to confirm intended ownership of the second property, details of any loans to be secured against this property (Property valuation and land registry search carried out by us if needed).

We will confirm the intended ownership of the second property prior to offer on the new mortgage / further advance. Current equity within the property must be over £50,000. We will use 80% of the current equity value of the property to support Interest Only lending. Please note that there is a minimum greater than £50,000 equity requirement for each individual property being used to support Interest Only lending.

Important points on the assessment:
  • We are not providing advice on your client's repayment plan(s) or making any guarantee that their plan(s) will be sufficient to repay the outstanding balance (capital) at the end of the mortgage term.
  • Your client should review their plan(s) regularly during the term of their mortgage to make sure it is on track to repay the outstanding balance.
  • Periodically, we will ask your client to provide evidence of their repayment plan(s). If your client is unable to satisfy us that their repayment plan(s) remains on track to repay the outstanding balance on their mortgage, we may ask your client to transfer some or all of their mortgage onto a capital and interest repayment basis.
  • Please remember it is your client's responsibility to ensure they have sufficient funds to repay their outstanding balance at the end of the mortgage term. If they are unable to do so, their home may be repossessed to repay the outstanding balance.
Important points on repayment plans:
  • Repayment plans CANNOT be accepted if they include the name of anyone NOT named on the mortgage.
  • Your client can use more than one repayment plan to cover their total interest only amount. In this case, please send the relevant evidence for all repayment plans.
  • The following are NOT acceptable repayment plans:
    • Sale of main residence.
    • Sale of other commercial property.
    • Sale of non property assets.
    • Inheritance.
    • Bonuses.
  • Maturity dates will be requested for each applicable repayment plan

Only repayment vehicles for those customers intending to live at the mortgaged property may be used to support the loan. E.G. if a parent is named on the mortgage to help with affordability then a property in the parents name cannot be accepted as a repayment vehicle.


 Key facts illustration (KFI)

Your clients must have received a key facts illustration before the application is submitted.


 Mix and match products

Most of our mortgage products can be combined in one mortgage, with the following exceptions:

  • Annual interest products cannot be mixed and matched with daily interest products.
  • Flexible.
  • New build.
  • First time buyer special.
  • CAT standard products cannot be mixed and matched with other products.

 Outstanding mortgage/non simultaneous sale

Non Simultaneous Sale & Purchase

Simultaneous sale and purchase is the preferred route, but we recognise that this is not always possible.

Existing property is for sale but will not be sold before new mortgage completes - The existing mortgage payment must be keyed as a credit commitment and will be included in the affordability calculation

Existing property to be rented out - The mortgage payment must be keyed as a credit commitment and the rent to be received keyed as 'Other Income' – 'Rental Income'. If confirmation is required we would request a letter from the letting agent confirming the expected rental income. We would normally expect the letting agent to be ARLA or NAEA registered.

Other Buy-to-Let mortgaged properties owned - The total of the mortgage payments must be keyed as a credit commitment and the total rent received keyed as 'Other Income' – 'Rental Income'


 Repayment type overview

  • Maximum LTV on interest only loans is 75%.
  • A mix of interest only and repayment is allowed but the total borrowing must be less than 75% LTV.
  • For house purchase and remortgage where the total LTV is over 75% all borrowing must be on a repayment basis.
  • Clients taking out a loan above 75% at application stage cannot transfer from repayment to interest only, within the first 12 months of completion of the mortgage.
  • New build and further advance applications are subject to a limit of 75% LTV for interest only and 80% LTV for repayment.

Credit scoring 

 Bankruptcies

The Bankruptcy question should be answered as yes if you have had a bankruptcy/IVA or Debt Relief Order within the last 6 years OR still have an outstanding Bankruptcy Restriction Order.


 County court judgements (CCJs)

Generally taken into account in credit scoring however background details are required.


 Credit scoring

All applications will be credit scored. If an application fails it is unlikely to be successful on appeal. If however, you feel it would improve the Halifax's and the client's position, then this can be referred in the usual way through your local processing centre using the Contact us button.

Product transfer applications are not credit scored.


 Mortgage arrears

Applications where previous mortgages have been in arrears will be considered on an individual basis, unless previously taken into possession by a lender.


Clients 

 Client verification

If we cannot complete electronic verification, we need to ensure that the customer is who they say they are from documents which confirm their identity and where they live.

Depending on the type of verification document provided, the customer will need to provide either one or two documents (see Acceptable Documents).

FCA registered firms must ensure that documentation relied upon to verify aspects of a customer's identify is copied and retained. Sufficient and accurate information must be recorded on our application system. You must also correctly indicate if the case is face to face or non face to face.

We reserve the right to request copies of identity documents seen for testing purposes.

Acceptable documentation

For face to face verification, one document from the Single Identification list can be used to verify the customer's name together with either their date of birth or residential address.

Where the customer has not been physically present for identification purposes, two separate documents must be provided to verify the customer's name, residential address and date of birth.

Documents must be originals and can only be used once throughout the whole process; i.e. used once for either address verification or for identification.

Single Identification Documentation
Document Identification Address Verification
EU/EEA Driving Licence
(Some not applicable)
Yes Yes
EU/EEA Identity Card
(Some not applicable)
Yes No
Firearms/Shotgun Certificate Yes Yes
Northern Ireland Voters Card Yes Yes
UK and Non UK Passport
(Some non UK passports not applicable)
Yes No
UK Driving Licence - Photo Card Yes Yes
Non Single Identification Documentation
Bank, Building Society or Credit Union Statement No Yes
Benefits/State Pension Notification Letter Yes No
Blue Disabled Driver's Pass Yes No
HM Revenue & Customs Correspondence No Yes
HM Revenue & Customs Tax Notification Yes Yes
Local Authority Tax Bill No Yes
Local Council Rent Card/Statement No Yes
Mortgage Statement No Yes
Record of Home Visit No Yes
Solicitors Correspondence No Yes
Utility Bill/ Utility Statement or a certificate/Letter from a Supplier of Utilities No Yes
Young Scot Card Yes No
Credit Card Statement No Yes
Tenancy Agreement No Yes

How to certify a document

If we ask you to provide ID documents, you must ensure that the following is present to satisfy certification requirements. This must be recorded by the FCA Registered Mortgage Intermediary:

  • Name of the certifier;
  • Signature of the certifier;
  • Date of certification, which must not be older than 3 months at the time of the application and;
  • Written confirmation from the certifier stating "I hereby certify that this is a true and correct copy of the original document as sighted by me" (suggested text / variations are acceptable).

 Concessionary Purchase

Concessionary purchases can only be agreed for subsequent sales (not new build) in the following circumstances:

The property purchase is solely for the applicant(s) to live in as their main residence and the applicant is:

  • Purchasing from an immediate family member* at a discounted price (minimum of 10% discount is required) and the vendor must move out on completion

OR

  • A sitting tenant purchasing from their landlord (private or council) at a discounted price (excluding Right to Buy)

NB: To qualify, the tenant must have been subject to a tenancy agreement on the property for a minimum of 1 year

* The only relationships permitted for a concessionary purchase are (including vice versa):

  • Parent/child
  • Siblings/sibling
  • Grandparent/grandchild.

All family purchase transactions must provide vacant possession (the vendor must be moving out) on completion. The discount on the purchase price must be a minimum of 10% of the market value and must be a genuine discount (must not be subject to any future repayment, clawback or retained interest terms)

A valuation must be instructed in all cases including properties in Scotland (retypes are not permitted).

Note: As the application results can differ on these cases once the correct purchase price has been keyed, you must contact The Halifax Intermediary Processing Team for all applications for Concessionary Purchase. This will ensure correct underwriting of the case has been carried out at the time of application.


 ExPats

We do not currently accept new business applications from ExPat residents.


 First time buyers (FTB)

To qualify for a FTB product, one applicant must not have previously bought or owned a property (including inherited/bought for cash).


 Foreign nationals
Non UK/EEA/A8 applicants

Original EEA member countries
Austria Belgium Cyprus
Denmark Finland France
Germany Greece Iceland
Ireland Italy Lichtenstein
Luxembourg Malta Netherlands
Norway Portugal Spain
Sweden Switzerland  

These are the original founding members of the EEA. Under the terms of the EEA agreement, all EEA citizens in this category have full rights to enter, live and work in the UK, provided they are able to support themselves without the need for State benefits.

Subsequent EEA member countries
Joined 1st May 2004
Czech Republic Estonia Hungary
Latvia Lithuania Poland
Slovakia Slovenia  
Joined 1st January 2007
Bulgaria Romania  

The citizens from the subsequent EEA member countries had restrictions placed on their rights to work in the UK and entitlement benefits for the first 7 years after joining the EEA. However, since 1st January 2014 citizens from the above countries are now treated in the same way as a citizens from the original founding EEA member countries.

Where the client is not a citizen of one of the countries listed above then the following checks must be completed:

  • Applicants must not enjoy diplomatic immunity
  • Passport includes indefinite leave to remain - proceed.
  • Passport does not include indefinite leave to remain but includes work permit or visa with minimum 2 years 6 months remaining - proceed.
  • If not, has the customer lived and worked in the UK for over 3 years (excluding refugees or any period as a student) - proceed
  • If not, where work permit has less than 2 years 6 months remaining employer must confirm that they have applied (or intend to apply) for the permit to be renewed - proceed
  • If none of the above applies, then the case may not proceed (or could be limited to 75% LTV).
  • Please ensure that if the passport has a visa stamp and if this stamp has specific conditions attached that any documents that refer to these conditions are submitted with the passport, i.e. if the visa says ‘As authorised by the secretary of state’ then the work permit and a letter from the employer confirming that they have applied (or intend to apply) for the permit to be renewed are submitted.
  • Some Non-EEA nationals may have an identity card issued by the home office in place of a visa, which will confirm the client's right to stay, work or study in the UK. These cards are acceptable.

Refugees

Refugees/asylum seekers must have indefinite leave to remain, which must be verified by the documentation from the Immigration and Nationality Directorate. This will consist of a letter confirming that they have been granted "Indefinite leave to remain". "Exceptional leave to remain" is not acceptable.

Spouse/partner of UK National

Income can be used once they have been granted permanent residency.


 Lending into retirement

Lending into retirement

The maximum age at the end of the mortgage term is 75 years for all lending.

Future retirement income will need to be verified where the client is taking a mortgage term which extends beyond the pension/retirement age (based on date of birth), or their anticipated retirement age, whichever is the earliest. Affordability will be assessed on the future retirement income. On occasions, a further review will be required to confirm we feel it is appropriate for the client to lend into retirement.


For State Pension, War Pension and Widows Pension
  • Latest 1 month bank statement
For Company or Private Pension:

One of the following:

  • Latest payslip
  • Latest bank statement
  • Latest pension statement/reference dated within last 12 months

 Max term

40 years - repayment, ISA, pension, PEP, endowment and interest only.


 Min/max age

  • Minimum 18 years.
  • Maximum retirement, unless retirement income meets affordability rules.

The maximum age at the end of the mortgage term is 75 years for all lending, with the exception of retirement home plan.


 Min/max loan

No minimum loan - see lending limits for full details of maximum loan, and minimum valuation for minimum valuation amount.


 Number of clients

  • Four clients allowed.
  • Two incomes are taken into account.
  • Discretion used for the third income.

 Remortgage

  • You must ensure your client(s) have owned their property for at least six months before submitting a re-mortgage application.
  • Maximum LTV for remortgages and capital raising is 90% (subject to product availability or unless stated otherwise).

 Vendor gifted deposits (VGD)

We will not accept any applications where an element of the deposit is provided by way of a Vendors Gift on a second hand property.

For new build properties please see New build


Income 

 Affordability

Halifax use affordability as a way of assessing how much they will lend. Please refer to our affordability calculator. PLEASE NOTE: The affordability calculator will give a guide to the amount we would be willing to lend however, as no credit search is carried out please be aware that this amount is subject to change once the DIP/Full Application is keyed.

When calculating affordability on interest only loans, Halifax will take into account the monthly premiums payable for the relevant repayment vehicle i.e. existing endowment or new or existing ISA. Please ensure the premium(s) is specified at both DIP and full application.

All applications are subject to satisfactory status checks including credit scoring. If your client does not keep to the mortgage conditions we may set off any money that they owe us against a credit balance in any account they hold with us, including a joint account.

We will update our affordability Mortgage criteria to include committed expenditure such as Student loan, Ground Rent, Leasehold Service Charge, Child care, School fees, Other committed expenditure, Mortgage / Rental commitment for existing Consent to Let customers. Affordability must also include future changes to income and expenditure.

Where a customer fails on affordability there are options to extend the term (up to retirement), extend term into retirement (subject to evidence of adequate retirement income) and on occasions, a further review to confirm we feel it is appropriate for the client to lend into retirement. Where the application is not affordable it will be declined.

We will be undertaking affordability checks on product transfers where there are material changes which affect affordability; where the customer is lending into retirement, reducing their term on the Capital and Interest element of the mortgage, changing repayment type or where they do not have adequate repayment vehicles in place.

Where there are no material changes to the mortgage the product transfer will be assessed on the customer’s budget assessment.


 Applicants not paid in Sterling

Where an application is received from a UK resident customer who is not paid in sterling, there are two acceptable scenarios:-

  1. The income is paid in to a UK bank account or;
  2. The income is paid into a UK based bank which has branches abroad (eg a Barclays branch in France)

If Income is paid into an overseas bank account initially and then transferred to a UK account, you must evidence all stages of the transaction by providing us with the relevant bank statements. In addition the latest 3 months payslips and P60 must be provided for all applicants not paid in sterling.

The income must be converted into sterling and the sterling equivalent entered into the Intermediary online system.


 Employment contracts

Sub Contractors, Fixed/short term contracts and Agency workers

Applications will be considered from the above employment types if the customer has a current continuous employment of 12 months or more with 6 months of the contract remaining or the customer has 2 years continuous service in the same type of employment.

Evidence of their employment track record may be required.

Customers should be treated as self employed if they pay their own tax or sub contract to more than one company.

IT and other contractors

For IT contractors on any income and other contractors whose income is more than £500 per day or £75,000 per annum: whether employed or self employed, we accept the gross value of the contract as evidence of income. All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service in the same type of employment.

Construction Industry Scheme Contractors

Applications from customers employed on a Construction Industry Scheme (CIS) Contract will be considered. An average of the latest 6 months income should be used and evidence of the income for these applicants must be provided.

Zero hours contracts

Applications from customers employed on a zero hours contract will be considered. The total of the last 12 calendar months income only will be used and the income must be evidenced.

Probation

If your clients are part of an employee probationary period then key ‘probationary' as the contract type and subject to an accept result at DIP / full application we can proceed.


 Income verification

EMPLOYED CATEGORIES

Income/Contract Type Verification document (preferred shown first alternative shown below) Criteria
Additional Duty Hours

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Additional Responsibility Allowance can only be used if evidenced that it is a permanent feature and guaranteed for the duration of the loan

Letter from employer

must confirm customer name, monetary value of the allowance and details of the period it will be paid for (no end date or an end date after the mortgage term expires would be acceptable)

Basic Salary (Including applicants on permanent contract with probationary period)

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Bonus

See Overtime, bonus, commission

Bursary (can only be used when keyed in addition to a basic income)

Letter of Confirmation from Payer

must show applicant name & monetary value of allowance

Latest full month Bank Statement

customer full name or initial & surname, account number, receipt of payment, bank heading/name & http address for internet statement

Cabin Crew/Flight Attendants - Pay/Allowances

Cabin crew income is a mix of basic pay and a high level of additional pay known as "Flight Pay" or "Flight Allowance".

You should enter the total additional pay/allowances under Additional Duty Hours within Other Income, using an average of the last three months to calculate the annual amount.

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Car Allowance

See Town, Area & Car Allowance

Child Benefit (key as Child Tax Credit)
(must not be used for any application that includes a customer on a gross income of £50,000 or more)

No verification documents required

Child Tax Credit/Working Tax Credit

Latest award letter from HMRC (all pages)

must show applicants name & address and relate to current tax year. Income declared to Inland Revenue for calculating the awarded amount must match the income keyed on the application otherwise the letter is unacceptable

Latest full month Bank Statement

customer full name or initial & surname, account number, receipt of payment for CTC/WTC, bank heading/name & http address for internet statement

CIS Contractors If Company Paying Tax should be keyed as employed providing they can confirm 12 months or more continuous employment with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment

Latest 6 months payslips/invoices and corresponding bank statements

payslip/invoice must show applicant & employer name, pay date, basic income, gross & net pay bank statement must show customer full name or initial & surname, account number, salary amount credited, employer name & bank heading/name & http address for internet statement

Employers Reference

On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference to verify the income

CIS Contractors
If Customer Paying Tax, has more than one contract or is employed by a Limited company he/she has set up

See self employed income verification

Commission

See Overtime, bonus, commission

Contractor - If applicant earns more than £500 per day or £75,000 per annum
 (For all other types of contractor please see Fixed/short term/Agency contracts)

Copy of the contract

All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment.

Council Tax Benefit

N/A

N/A

Disability Living Allowance

The following income types should be entered as 'Disability Living Allowance':

Attendance allowance Constant Attendance Allowance (CAA) Constant Carers Allowance Carers Allowance (CA) Disability Living Allowance Incapacity benefit Employment & Support Allowance Severe Disablement Allowance (SDA) Industrial Injuries Disablement Benefit (Accidents & Diseases) Mobility Payments - these can only be included if they are part of any other disablement benefits. Thalidomide Trust Income

DLA Award Letter

must be dated within the last 12 months, show applicant name & monetary value of allowance

Latest full Bank Statement

customer full name or initial & surname, account number, receipt of payment for DLA, bank heading/name & http address for internet statement

DWP or Income Support

N/A

N/A

Employed in a Family Business
If Less than 25% Invested interest (treat as employed)

Latest payslip & corresponding bank statement

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Latest SA302

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Employed in a Family Business
Equal to or greater than 25% Invested interest (Treat as Self Employed)

Last 3 years SA302's

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Fixed / Short Term / Agency Contracts
If applicant paying own tax should be keyed as self employed

See self employed income verification

Fixed / Short Term/Agency  Contracts

If Company Paying Tax (Excluding CIS contractors) should be keyed as employed providing they can confirm 12 months or more continuous employment with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment

Latest payslip, (this applies whether the applicant is paid weekly or monthly).

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Flexible Benefits (we accept 100% of this as a form of main income & should be keyed as basic income)

same as evidencing Basic Income

Foster Care Allowance (Only portion of allowance that is taxable can be used as income)

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Holiday Pay

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Housing Benefit

N/A

N/A

IT Contractors - refer to fixed/short term contracts, company paying tax

Copy of the IT Contract

All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment.

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Maintenance Income (including adoption & guardian allowance)

Bank Statements (latest 3 consecutive full months)

customer full name or initial & surname, account number, receipt of payment, bank heading/name & http address for internet statement

Court Order (minute agreements for maintenance income are not required to be sealed) Maintenance Assessment Letter from Child Support Agency (CSA)

Must show applicant name & monetary value

Maternity Pay providing the applicant will return to work on the same terms.

Latest payslip received prior to commencement of maternity leave or latest payslip where annual salary is clearly displayed

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer’s reference to verify the income.

New Job, Payrise or Promotion Income/higher income can be keyed on application

Employers Reference (if new income amount is not already shown on latest payslip)

Payslip must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Nursing Bank

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Overtime Bonus Commission (must represent a regular and sustainable feature of the applicant's income) (Deferred bonuses are usually conditional and may not be guaranteed. Bonuses must not be keyed onto MSP unless they have already been paid out)

If received weekly, monthly or quarterly, then latest 3 payslips/last quarterly bonus payslip. If received annually, then either latest payslip showing bonus or latest P60

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Piecework Contract

N/A

N/A

Rental Income (If the property is to be let)

Letter from Letting Agent

must be on company headed paper, addressed to applicant & confirm expected rental payment

Rental Income (If the property is already let)

3 months consecutive bank statements Tenancy Agreement (current) Letter from Letting Agent OR Letter from accountant or solicitor

customer full name or initial & surname, account number, receipt of rental income, bank heading/name & http address for internet statement must show applicants name, rental period & rental payment must be on company headed paper, addressed to applicant & confirm property address, rental payment & that the property is currently rented

Retirement State/Company Pension Tax Credits War Pension

Latest month full Bank Statement

customer full name or initial & surname, account number, pension amount credited, pension provider name & bank heading/name & http address for internet statement

Latest payslip, pension statement or P60 (dated within 12 months)

P60 - must be dated within the last 12 months, show applicant name, company name & income amount
On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference

Retirement Private Pension

Pensions Statement

must show applicant & employer name, pay date, basic income, gross & net pay

Seasonal Contract

N/A

N/A

Shift Allowance

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income

Stipend (we accept 100% of this as a form of main income & should be keyed as basic income)

Letter of Confirmation from Payer

must show applicant name & monetary value of allowance

Supply Teacher (where the customer has current continuous employment of 12 months or more and has 6 months remaining or the customer has at least 2 years continuous service (for the last 2 years as at the date of application) in the same type of employment, income can be used

same as evidencing Basic Income

Temporary Contract

N/A

N/A

Town, Area or Car Allowance (excluding mileage allowance)

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income

Trust Income

N/A

N/A

Widows Allowance/State Widows Pension (should be keyed as shift allowance)

Latest month full Bank Statement

customer full name or initial & surname, account number, pension/allowance amount credited from DWP & bank heading/name & http address for internet statement

DWP Award Letter (dated within last 12 months)

must be dated within the last 12 months, show applicant name & monetary value of allowance

Widows Private Company Pension (should be keyed as retirement income)

One of the following dated within 12 months: Payslip, Pension Statement or P60

Payslip must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability Pension statement must show applicant & pension provider name, pay date, gross & net pay P60 must be dated within the last 12 months, show applicant name, company name & income amount

Working Tax Credit

See Child Tax Credit/Working Tax Credit

Zero Hours Contracts The income should be keyed as the income earned over the last 12 calendar months.

The customer must have been employed on a zero hours contract for a minimum of 12 months (same employer OR same type of work but different employers)

12 months payslips

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

P60 plus subsequent payslips to cover the full 12 month period

OR

Employers Reference

P60 - must be dated within the last 12 months, show applicant name, company name & income amount

On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference to verify the income

SELF EMPLOYED CATEGORIES

Income/Contract Type Verification document (preferred shown first alternative shown below) Criteria
Ltd Company – Director/Shareholder - less than 25% Wanting to use basic PAYE only - Treat as Employed

Latest payslip,(this applies whether the applicant is paid weekly or monthly).

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

Providing the applicant is NOT employed by a family business, on occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Ltd Company – Director/Shareholder - equal to or greater than 25% Wanting to use basic PAYE only - Treat as Self Employed

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Ltd Company – Director/Shareholder -Irrespective of shareholding Wanting to use basic PAYE (salary) & Dividends - Treat as Self Employed

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Sole Trader OR Partnership

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Partner of LLP receiving profit share as part of their salary package - irrespective of share of equity (Treat as Self Employed)

Latest 3 years SA302's

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Employeeof LLP - not equity shareholding partner (Treat as employed)

Latest payslip (this applies whether the applicant is paid weekly or monthly)

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income


 Length of employment

  • Employed - Current employment details collected
  • Self Employed - 3 years history requested however, where the business has been trading for less than 3 years and so self employed income is not available for 3 years, we will still consider these applications. You must record all relevant years' income accurately on the mortgage application.

 Self Employed Applicants

If any of the following criteria applies, the customer must be keyed as self employed. Additionally, where they have been self employed for 3 years or more, the full 3 years income documentation must be provided.

The following information is intended to give an outline of our income requirements:

  • Where the customer has a shareholding of 25% or more
  • If joint customers own 25% or more between them, treat both customers as self-employed (both applicants need to hold a % share)
  • A sub-contractor who derives income from more than one contract
  • A customer has a partnership interest in a business, i.e. income is not PAYE, irrespective of the percentage shareholding
  • A customer owns a franchise
  • A customer employed by a Private Limited Company (LTD) or Limited Liability Partnership (LLP) who receives a salary (PAYE) and dividends as part of their remuneration package and / or Net Profits

For applicants who are classed as self-employed, you should capture all of their income under the field "Net Profit". Whilst some self-employed income we allow is not truly 'net profit', we use this field in our affordability assessment and in our policy rules.

Acceptable Income Verification Documents

Latest 3 Years Inland Revenue Tax Calculation (SA302) – Original SA302's on headed paper are acceptable. Prints of the online version are not acceptable. The year the SA302 relates to and Customers name / initials must show. SA302's can be obtained by contacting HMRC.

Latest 3 Years Full Accounts – must be finalised, signed by the accountant and clearly show the net profit (for Sole Traders), share of net profit (for Partnerships) or salary & dividends (for Directors of Limited companies). Profit & Loss statements alone are not acceptable.

The year end on all documentation must be the most recent and must not be dated more than 18 months before the date of application. We do not accept forms, paper or online versions from the HMRC website used to file an annual tax return. SA302's can be obtained by contacting HMRC. We reserve the right to request accounts where necessary.


Property 

 Condition

The property must meet minimum criteria. Must be habitable, readily saleable, structurally sound and be able to have buildings insurance arranged upon it. The mortgage advance may be wholly or partially retained pending completion of works required to bring the property to a suitable condition for lending.


 Construction

Property acceptability is based on a satisfactory valuation report from the bank's appointed valuer. Non-standard construction will be assessed on individual merit. Certain types of pre-cast reinforced concrete (PRC) construction are designated defective and may not be acceptable unless repaired.


 Distressed sale and leaseback

Applications that involve a distressed sale or a sale and leaseback are not acceptable.


 Flats

We do not lend on Freehold Flats

Studio and basement flats acceptable, subject to valuer's comments

No limit to acceptable number of floors, subject to valuer's comments


 Leasehold

If leasehold, the property must have an unexpired term of more than 70 years at application.


 Lending limits

See below for variations to the limits set within this table

Lending limits

Up to £750,000

90%

£750,001 - £1,000,000

85%

£1,000,001 - £2,000,000

80%

£2,000,001 - £5,000,000

70%

Greater than £5,000,000

50%

  • The maximum loan on an interest only basis is 75%.
  • The maximum loan for standard new build 80% (this includes converted or refurbished properties where the vendor is a builder/developer and the property has been vacated to allow the refurbishment to be undertaken)
  • The maximum loan to value limits for a second home loan or buy to let scheme is 75% (65% for newbuild properties).

We do not currently accept new business applications from ExPat residents


 Location

Property must be situated within the UK and subject to a UK legal jurisdiction.


 Mortgage Free Property (Unencumbered Properties)

Loans on mortgage free properties are treated as purchases not remortgages and so must be keyed as 'Home Movers'. The customer is only eligible for the Home Mover range of products and not the remortgage products or incentives. Free legals are not available for these applications and there is no right to appeal the property valuation.

How to key

To ensure that loans on mortgage free properties are processed correctly, the case should be keyed as follows:

  1. Select 'Home Mover' in the dropdown list for Customer Type.
  2. Under Residential Type select 'Homeowner - Mortgage Free'.
  3. Enter the customer’s estimated valuation for Purchase Price.
  4. Enter Source of Deposit as 'Equity' from the dropdown list.

A valuation fee will be payable on these applications.

Note: The property must have been registered in the applicant’s name (or at least one of the applicants' names) for a minimum of six months.


 New build

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:

  • Newly built property.
  • Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.
  • Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.
  • A property, either new or converted (as above), that has been tenanted and is now offered for sale by the builder/developer.
  • Property must be subject to one of the following building control and monitoring requirements:
    • Building Standards Indemnity Scheme from a warranty provider accepted by Lloyds Banking Group
    • Professional consultant where small, solely residential development of no more than 15 units – consultant must meet qualifying criteria
    • An acceptable guarantee from a development corporation or local authority where they are the vendor.
  • A final inspection is required to confirm completion of the new property unless covered by an acceptable new build warranty provider.
  • Barn conversions / converted properties are subject to a full retention pending completion of works and subject to new build criteria.

Maximum LTV on new build properties (houses and flats) is 80% (65% if the scheme type is a second home loan or buy to let).

Builder cash incentives include but are not limited to deposit contributions, cash-backs, contribution to legal fees/stamp duty, mortgage subsidies.

Builder cash incentives will typically be acceptable provided the value of these does not exceed 5% of the lower of purchase price/valuation. Cash incentives in excess of this amount may result in a reduction in the maximum loan available. All builder cash incentives must be declared at the point of sale.

Cash incentives for shared equity applications are acceptable provided the total value of the loan plus incentive together does not exceed 95% of the value of the equity share being purchased.

All lending decisions are based on valuation or purchase price (whichever is lower).


 Remortgage service

The remortgage service is available on most, but not all, of our remortgage products. Where your client uses our remortgage service, we will pay our conveyancer’s legal fees, any registration fees and, if the property is leasehold, their landlord's fees for answering our conveyancer's enquiries.

Your client will have to pay any fees their existing lender may charge in connection with repaying your clients current mortgage.

These include your client's existing lender's conveyancer's fees if the existing lender does not allow our conveyancer to act for them too. Halifax conveyancer's may be able to offer to do extra legal work for your client at the same time as the remortgage (not in Northern Ireland). If your client decides to use them, they will make a separate charge for the extra work and your client will have to pay for it. Your client should ask about the charge before asking the conveyancers to do any extra work for them.

Your client can choose their own conveyancer to act. Please note also that our remortgage service is not available with some of our remortgage products and your client will have to choose their own conveyancer to act if they decide to have one of these products. This conveyancer will act for Halifax in the remortgage, provided they are on our panel of conveyancers, and your client must pay the legal charges, and any search fees, registration fees or other costs, whether or not the matter goes ahead. The search insurance facility will not be available.

Please be advised that the remortgage service is not available for clients who are capital-raising on a mortgage-free property. These clients should be offered 'homemover' products and must therefore:

  • Pay the relevant valuation fee.
  • Arrange and pay for their conveyancing.

They will be entitled to the relevant 'homemover' product and any associated incentive.

Applications involving finder’s fees are not acceptable. A finder’s fee is a fee or commission paid by a seller to a third party (such as an investment club) for finding or introducing a buyer. It does not include the normal fee or commission payable to any estate agent handling the sale.


 Retirement home plan (RHP) / Lifetime

From Monday 11 March, we will no longer offer mortgages for existing customers moving home, Product Transfers or Further Advances for Retirement Home Plan (RHP) in Halifax brand for all channels.

Customers should contact Halifax on 08457 273747 in the first instance where they will be provided with details of how to progress their requirements.


 Revised property details

If the purchase property address changes once a mortgage application has been made, and the client's original mortgage product has been withdrawn, a new product from the current range must be selected.

If the property being purchased is not changing but an amendment is required to the address keyed e.g. property number or street name this must be amended by us prior to completion. You should fax the revised information to ourselves on 0845 603 9009 - please ensure the roll number is included. THIS CANNOT BE ACTIONED ON THE TELEPHONE


 Right to buy

Loans may be accepted up to 100% of the discounted purchase price, provided that they do not exceed Halifax lending limits based on valuation.

Home improvements allowed - for funds to be released we require sight of invoices, alternatively a retention will be made at completion; funds will then be released on production of invoices.


 Second Home Loan

Lets your client apply for a mortgage on a property to be used primarily as a holiday / second home

  • We will allow 1 residential plus 3 ‘other” properties with LBG (across BTL and Second Home Loan)
  • We will consider a maximum portfolio value of £2m and a maximum LTV of 75% (65% for new build properties).
  • We will not accept Right to Buy, Guarantor applications or Builders Incentive Schemes.
  • Occasional letting is allowed up to a period of four months with special conditions placed on the mortgage. If the Second Home is for let for more than four months this will be treated as a Buy to Let.
  • Income must cover all mortgage commitments and the additional expense of running second home properties
  • Minimum applicant age of 18 years
  • Applications where a tenancy agreement is in place between applicant and family member cannot be accepted - The mortgage can be used where a family member will occupy the property provided there is not a formal tenancy agreement.

 Section 106 planning agreements / restrictive covenants

  • Intended to regulate development or proposed use of property
  • Range is varied but may include:
    • Limiting occupation to a certain category of occupant - local residents, first time buyers, specified age requirement, specified employment types
    • Restricting use of property - tied to agricultural use, restricting residential occupation to certain time limits, for example, 10 months of the year.
  • The impact on acceptability depends upon the impact of the restriction. There may be a strong local demand for the property from qualifying purchasers.
  • Broadly restrictions that mean a property must be used for agricultural use will be unacceptable.
  • The valuer will determine the impact on the suitability of the property for lending and the conveyancer will determine whether the purchaser / owner complies with the obligation, advising the bank if any issues that may impact the lending.
  • Where the restriction limits the time a property can be occupied this will only be acceptable for holiday homes / second home loans and subject to the valuer confirming the property is suitable for lending.

 Self build

For full details around self build, visit:-


 Shared equity (including Help To Buy)

Lets your clients buy a home by sharing the equity with a third party.

  • Halifax must have first charge. The seller secures their interest by way of a second charge.
  • We will consider lending up to 95% of the value of the purchase price.
  • The maximum equity share a builder or private company can retain is 25%.
  • Client must pay a 5% personal deposit (excluding any deposit provided by a builder or housing association).
  • The mortgage must be on a repayment basis. (A request to transfer to a full/part interest only basis as a means of reducing outgoings for customers in financial difficulties may be considered.)
  • We do not allow any remortgage applications, where there is any element of debt consolidation.
  • The term of the mortgage must be shorter than or equal to the equity loan term

Help to Buy deposit verification

For certain Help To Buy applications, deposit verification will be requested. A list of acceptable documents is detailed below:

Gift

You should obtain a letter written by the donor that meets all of the following requirements:

  • Addressed to Halifax
  • Dated within the last three months
  • Details the person/people gifting the deposit and the current name and address of the applicant(s), together with the property being purchased
  • Confirms the relationship between the donor(s) and the applicant(s). The donor should be a family member. See definition of family member below.
  • Details the donor’s full address and is signed
  • Confirms the amount of the deposit, that it isn’t repayable and that the donor will hold no interest in the property following completion of the mortgage
  • The source of the deposit.

You should also provide a bank statement or passbook from the donor showing the deposit funds being transferred out of the account. Alternatively, the donor may provide a letter from their bank confirming that the funds have been transferred. Additional statements may be requested where required.

The definition of a family member is someone who is related to at least one of the applicants:

  • by birth/blood relative
  • by marriage or civil partnership (including step children, adopted children and in-laws)
  • as ‘Common Law’ partners or co-habitees

Gifts from friends or employers are not acceptable.

Savings

You should obtain:

  • The latest three months' bank statements or a passbook covering the latest three months' transactions showing the applicant's name, account details (sort code and account number for bank statements or account number for passbooks) and company name, or the latest annual statement for longer term savings plans
  • The statements or passbook should be in the name of at least one of the applicants
  • The latest closing balance must cover the total deposit required
  • Any recent large or unusual deposit may require clarification to establish the source.

Forces Help To Buy (previously called Long Service Advance of pay)

Serving members of HM Forces may be able to raise capital for a deposit by means of a 'Forces Help To Buy' (FHTB) interest free loan which will be repaid by the customer through their pay. This can be accepted as a deposit for a mortgage on a main residence or when using the Help To Buy Equity Loan scheme and the repayment must be keyed as a commitment. FHTB cannot be used in conjunction with the Help To Buy Mortgage Guarantee scheme. The HTB mortgage guarantee scheme must not be selected where the customer is using the FHTB as a deposit.

FHTBs are repayable interest free over 10 years so to calculate the monthly payment, divide the amount borrowed under the FHTB scheme by 120.

Where the deposit is funded from FHTB, the deposit type should be keyed as savings. The applicant will not receive confirmation of the FHTB amount from HM Forces until they have received their mortgage offer, so there is no requirement to obtain evidence.

Application processing

If the customer is required to make interest payments to the subsequent charge holder for the equity providers retained share, this must be calculated and taken into account in affordability calculation regardless of when the interest charge becomes payable.

The amount of interest charged should be keyed as 3% from the start of the mortgage unless the actual rate is higher, in which case the actual rate should be used. If customer does not pay any interest, then a rate of 0% should be used.

The figure calculated must be entered in ‘Monthly Interest Payment field.

Further information

For further information on processing shared equity scheme or Help to Buy applications, contact your local processing centre.


 Shared ownership

Shared ownership allows a customer to buy a home in stages. The customer purchases a property jointly with either a Housing Association (HA), also known as a Registered Social Landlord (RSL) or a Local Authority (LA).

The customer will own a percentage of the property, with the remaining percentage being owned by the Housing Association/Local Authority. The terms of this arrangement is set out in a shared ownership lease.

When a customer applies for a mortgage to buy a shared ownership property we are only lending on a specific percentage of the property value which means the customer will own a share of the property and pay rent to the Housing Association/Local Authority for the remaining share. Some shared ownership schemes may be aimed at members of the public such as key workers.

Maximum 90% of share, subject to mortgage protection clause or section 442 agreement; maximum 75% if no clause/agreement. Minimum share - 25%. Conveyancer to confirm acceptability. Verbal confirmation is required from Housing Association confirming if mortgage protection clause in lease.

The mortgage must be conducted on a full repayment basis.

The facility to transfer the mortgage to full or part interest only is not available whilst the mortgage is conducted on a shared ownership basis.


 Sub sales and back-to-back transactions

Sub-sales and back-to-back transactions are not acceptable.

A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. The date of registration at the Land Registry is how we determine the length of ownership.

This means that the current vendor must have owned the property for at least six months before we can accept an application to purchase that property, unless the property has been inherited.

A back-to-back transaction is a type of sub-sale where the intervening seller buys from the original seller and sells on to the borrower on the same day or within a few days. We also regard as sub-sales, cases where the seller acquires the freehold (or superior leasehold) title to the property, which they then immediately sell on to the borrower by the grant to them of a lease (or sub-lease).

The following cases are exceptions where it is acceptable for the property to be sold on within six months of acquisition by the seller.

Where sales are by:

  • A personal representative of the registered proprietor; or
  • An institutional mortgagee exercising its power of sale; or
  • A receiver, trustee-in-bankruptcy or liquidator; or
  • A developer or builder selling a property acquired under a part-exchange scheme.

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.


 Tenure

  • Freehold flats / maisonettes are not acceptable, unless freehold reversion / Tyneside arrangements and no more than four flats in building.
  • For leasehold property there must be a minimum of 70 years remaining on the lease at application. Shorter lease terms are only accepted on certain central London estates and subject to specific criteria.
  • Commonhold property is not accepted.

 Type of property

Houseboats and mobile homes / park homes are not acceptable.


 Unacceptable Construction Types

Timber or metal framed buildings where the cavity, between frame & cladding, has been retrospectively filled with an insulation material

Concrete walls as built in Cornwall or Devon before 1950 (1960 for postcodes PL12, 13, 14, 15, 17, 18, 22 & 23) where valuer has recommended a Mundic report and test of the concrete has classified the concrete in either class B or C

Unrepaired, designated defective properties under the Housing Defect Act or not

Flats or maisonettes of large panel system type unless acceptable structural appraisal on the whole block.

Load bearing panels of asbestos or gypsum plaster construction

Properties which are structurally unsound & Properties which are uninsurable.


 Unencumbered Properties (Mortgage Free Property)

Loans on mortgage free properties must be keyed as 'Home Movers' and the customer is only eligible for the Home Mover range of products and not remortgage products or incentives. Free legals are not available for these applications. Refer to the appropriate product range:

How to key

To ensure that loans on mortgage free properties are processed correctly, the case should be keyed as follows:

  1. Select 'Home Mover' in the dropdown list for Customer Type.
  2. Under Residential Type select 'Homeowner - Mortgage Free'.
  3. Enter the customer’s estimated valuation for Purchase Price.
  4. Enter Source of Deposit as 'Equity' from the dropdown list.

A valuation fee will be payable on these applications.

Note: The property must have been registered in the applicant’s name (or at least one of the applicants' names) for a minimum of six months.


 Use of property

  • Property must be assessed as an individual residential property intended for owner occupation.
  • Farms or property with land that is subject to commercial agricultural use, Commercial property and Timeshare are not acceptable.
  • Limited incidental business use may be acceptable subject to property retaining residential status.
  • Live / work schemes may be acceptable on mainstream lending only subject to compliance with planning condition and ‘work’ element using less than 40% of the property.

 Valuation

The minimum valuation amount for all lending is £40,000.


Once the mortgage completes 

 Bank of England rate changes

Tracker rates are linked to the Bank of England bank rate. This is announced from time to time by the Bank of England's Monetary Policy Committee (MPC). If the MPC decides to change the bank rate, we will change the tracker rate in line with it. This will be within 30 days of the publication of the minutes of the MPC meeting at which the decision to change the bank rate was made.

At the end of the tracker rate period the tracker rate mortgage will cease to be a tracker rate mortgage and we will charge your client interest at:

  • Halifax Homeowner Variable Rate - for mortgages applied for after 4th January 2011.
  • Halifax Standard Variable Rate - for mortgages applied for before 4th January 2011.

Unless we write to tell them that we are prepared to allow the mortgage to remain a tracker rate mortgage.

All variable rates are stated at their current levels and are subject to change.


 Early repayment charges

Some of our products have early repayment charges attached to them. An early repayment charge will apply if your client takes a product transfer or repays some or all of their mortgage during the early repayment charge period.

If your client chooses a mortgage product with early repayment charges, as a concession, in any period of 12 months, your client may repay up to 10% of the amount outstanding on their product, without having to pay an early repayment charge. We reserve the right to change or withdraw this concession.


 First payment due

For 10/0 numbers

The first payment is always collected in the month following completion. Initial interest is calculated from the completion date and added to the mortgage at the end of the month. For example:

  • If completion occurs on the 15th, interest is calculated from the 15th to the end of the month and then added to the first payment
  • If completion occurs on the 5th, interest is calculated from the 5th to the end of the month and then added to the first payment

If completion occurs in the last few days of any month and results in less than 4 working days between the completion date and the customer's chosen payment date (excluding those days), the first payment will be collected on the 10th of that month. This date will then revert to the customer's chosen payment date on the following month.


 Further advances and product transfers

More details available on the 'Further advance and product transfers lending criteria' page.


 Halifax Homeowner Variable Rate

This is the reversionary rate that will apply to the mortgage after the initial product period ends. Halifax Homeowner Variable Rate will apply to all mortgages applied for on or after 4th January 2011. Before this date the Halifax Standard Variable Rate will be the rate that applies

It is not available for selection for new applications, further advances and product transfers. It will vary in relation to market conditions. Halifax Homeowner Variable Rate is not linked to the Bank of England bank rate.


 Halifax Standard Variable Rate

This is currently used as a reversionary rate for mortgages applied for before 4th January 2011. It is not available for selection for new applications, further advances and product transfers. It will vary in relation to market conditions.


 Initial interest

For 10/ numbers

The first payment is always collected in the month following completion. Initial interest is calculated from the completion date and added to the mortgage at the end of the month. For example:

If completion occurs on the 15th, interest is calculated from the 15th to the end of the month and then added to the first payment

If completion occurs on the 5th, interest is calculated from the 5th to the end of the month and then added to the first payment


 Overpayment and payment holidays

Overpayments

Lump sum or regular overpayments can be made at any time. If early repayment charges apply to the product, refer to early repayment charges for more details.

Payment holidays

Payment holidays can be requested providing the account is no more than one month in arrears and is at least three months old and:

  • No payment arrangements have been made in the last six months.
  • The total outstanding debt does not exceed the maximum lending limit for the type of loan.
  • No second mortgage or subsequent charge has been registered from another lender.
  • Your client is not currently claiming on mortgage repayments insurance policies.
  • Where your client already has a Halifax homeowner loan secured on the property, the projected mortgage debt plus the amount due under the homeowner loan is no more than 75% of our indexed valuation of the property.

Payment holidays only apply to the monthly mortgage payment. Interest is charged during a payment holiday. Insurance, life assurance and mortgage repayments insurance must continue to be paid. At the end of the payment holiday a new monthly payment will be calculated on the total mortgage debt including the suspended payments.


 Portability

If a product is portable this is outlined in the original mortgage offer and supporting documentation.

To port a product the new mortgage application must be received before the current mortgage is redeemed and completion must be simultaneous.

Where Halifax Standard Variable Rate is the reversionary rate which applies to the product being ported, it will continue to be the reversionary rate for the amount of the new mortgage which is on the ported product.

Any extra amount borrowed on the new mortgage must be on a current product and the reversionary rate which applies to that product and the amount on it will be Halifax Homeowner Variable Rate.

Flexible products, BTL products and reversionary rates are not portable.


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Our tracker rate mortgages are linked to Bank of England bank rate (also known as Bank of England repo rate). Details of this rate can be found on the Bank of England website at www.bankofengland.co.uk.

For independent information on mortgages, visit the website 'Money Advice Service'.

If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise retail clients, you must ensure it conforms to the Financial Conduct Authority's advising and selling rules. This site is intended for UK residents unless otherwise stated.

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