Residential Criteria

Our criteria is designed to suit people in interesting situations

Those who have a complex income, young credit history, experienced previous financial difficulties, or are recently self-employed.

Our Residential criteria

Applicant criteria

Applicant details

Minimum age:

Maximum age:

75 at end of term
For joint applications the age of the oldest application is used
The term cannot extend beyond the applicants stated retirement age

Maximum applicants:

Guarantors:

Not accepted

First-time buyers:

Accepted

Marital status:

Applications from married/civil partnership applicants must be in joint names

Maximum allowable adverse

CCJs & defaults:

None in the last 6 months

Mortgage arrears:

Arrears status of 0 in last 6 months
None missed in the last 12 months

Unsecured arrears:

Fixed term: None in the last 6 months
Revolving credit: Missed payments consideredOn Pepper 24, 18, 12 and 6 products we will ignore 2 individual defaults (per application), up to and including £150.00 each, where these defaults relate to utilities, communications or mail order providers.

IVA & Bankruptcy:

Accepted where applicants have been discharged 6 or more years ago

Pay day loans:

Accepted where the account closed more than 12 months ago

Repossessions:

Accepted where repossession occurred more than 6 years ago

Debt management plans (DMP)

DMP rangeFor active DMPs or those satisfied in the last 12 months, a separate product range is available. The following criteria applies: – Must have been active for a minimum of 12 months – Must be able to provide proof of satisfactory payments from DMP provider – If active, doesn’t have to be repaid at completion – For remortgages, capital raising can be considered to clear the DMP – No more than 1 active DMP per application
Standard rangeAccepted if satisfied over 12 months ago

Nationality & residency

Residential status:

3 years’ UK residential address history required for all applicants

EU Nationals accepted subject to:

3 years’ UK residency
3 years’ continuous UK employment history

Non EU Nationals accepted subject to:

3 years’ UK residency
3 years’ continuous UK employment history
Indefinite leave to remain

Diplomatic immunity:

Not accepted

Income criteria

Income

Minimum earned income:

£18,000 per application

Foreign currency:

Not accepted

Employed, self-employed & retired

Employed:

Minimum of 6 months in current job with 12 months’ continuous employment
Day rate contractors accepted subject to being in a contract and able to demonstrate a minimum 12 months’ history. Calculate the income as the lower of 12 months’ average day rate amount or current contract day rate, x 5 (days per week) x 46 (working weeks)
Contract employees considered provided 12 months’ employment with the same employer, together with confirmation the contract will be renewed
3 months’ payslips with 3 months’ bank statements and last P60
Applicants in a probationary period not accepted
Zero hour contracts acceptable, if a permanent position, with 2 years+ at same employer, and stable income levels
Income from seasonal/temporary work not considered
Directors with a shareholding of 25% or more will be underwritten as self-employed

Income type	Proportion considered
Basic salary	100%
Car allowance	100%

Self-employed: Sole Trader/Partnership:

Minimum of 1 year’s accounts
3 months’ business account bank statements
SA302s will only be accepted in addition to the full business accounts. SA302s are not acceptable proof of income on their own but will be requested where the accounts have been prepared by an accountant who does not appear on our list of accepted qualifications. We may also request them to confirm dividends which do not appear in the business accounts.

Additional remuneration considered where applicants own 100% of the company:

Directors’ car allowance
Directors’ pension contributions
Use of home as an office
Private health insurance

Where additional remuneration is to be added back, finalised accounts will be required Self-employed: company director:

Minimum of 1 year’s accounts
3 months’ business account bank statements
SA302s may be requested to support company accounts

Retired:

Private pension accepted

Other income sources

Pension income:

State retirement pension (SRP) – latest annual statement of pension
Private pension – latest payslip from pension provider or letter from pension provider, with 3 months’ bank account statements showing credits

Secondary/additional income:

Employment/self-employment income from a maximum of two sources per applicant considered
Benefits and maintenance may be included as additional income

Loan criteria

Maximum LTV:

Up to £1 million available to 75% LTV
Up to £750,000 available to 85% LTV

Maximum term:

35 years

Minimum term:

5 years

Minimum loan:

£25,001

Maximum loan:

Up to £ 1 million available to 75% LTV
Up to £750,000 available to 85% LTV

Number of mortgages with Pepper:

Maximum of 3 per applicant, including any joint loans the applicants are party to
Can be a mixture of Buy to Let and Residential loans

Remortgage applications:

Accepted where applicant has been the registered owner for the last 6 months at application

Repayment:

Capital & interest
Interest only to 60% LTV, supported by an acceptable repayment strategy

Portable:

Products are not portable

Offer validity:

90 days

Let to buy:

Not Accepted

Right to Buy:

Not accepted

Deposit criteria

Evidence of deposit:

Required on all purchase applications

Applicants’ savings:

Considered

Capital raising remortgage:

Considered

Inheritance:

Accepted

Cash gifted deposit:

Parent/Step-Parent/Parent-in-Law
Sibling
Child/Step-Child/Son-in-Law/Daughter-in-Law
Aunt/Uncle
Grandparent/Grandchild

Unacceptable sources:

Builders deposit
Unsecured borrowing
Vendor deposit

Property criteria

General criteria

New build definition:

A property is to be considered new if it is a first sale by the builder
However, properties which have not sold on physical completion will be considered on an individual basis

Minimum property value:

£70,000

Locations considered:

England, Wales & Isle of Wight

Retentions:

Not offered

Acceptable property:

Houses: private and ex local authority or social housing
Flats & maisonettes: Private only

Alternative construction

Timber framed construction:

Modern timber framed properties clad with masonry are considered as acceptable
Timber framed properties which are not deemed to be of a modern type clad with masonry will be reviewed on an individual basis and will be considered on their merits

Flying freeholds:

Flying freeholds will only be considered up to 20% of the total floor area

Coal mining and other forms of extraction:

Any properties with a coal mining or metalliferous mining entry/feature within 20m of any building will not be considered

Electromagnetic fields:

Any properties within 100m of above ground high voltage electrical supply apparatus will not be considered

Contaminated land:

Where there is potential for contaminated land, a pass certificate must be available from an appropriate body

Japanese knotweed:

Where a property has Japanese knotweed (or any other invasive weed) located within or immediately adjacent to the site defined as category 4, 3 or 2 in RICS paper IP 27/2012, will not be considered

Solar panels:

Properties where solar panels have been installed and are subject to a lease agreement will not be considered
If the solar panels are owned outright, the application will be reviewed on a case-by-case basis

Tenure

Freehold:

Houses only accepted

Leasehold:

The lease must have a minimum unexpired term of 85 years at the time of completion

Commonhold:

Not considered

Property reports

Structural reports

Reports may be accepted from members of the following bodies:

– The Institution of Structural Engineers (www.istructe.org.uk)

– The Institution of Civil Engineers (www.ice.org.uk)

The report must be referred to the valuer for comment. If the report is not addressed to the applicant, written confirmation must be obtained from the originator that its contents may be relied upon by the applicant(s).

We will not lend on any property with either ongoing movement or where monitoring is required, where this is identified by either the valuer, or where evident in the structural engineer’s report.

The valuer may request additional reports from specific governing bodies.

Specialist reports

We may require specialists’ reports. These most commonly will be:

– Timber and damp, electrical, trees, cavity wall ties;

– Mining report (as these are obtained by the solicitors, a special condition is imposed at offer);

– Any such reports should be prepared by a reputable firm and should be forwarded to us for review and referral to the valuer

The valuer may request additional reports from specific governing bodies

Unacceptable property

General:

New build properties without suitable warranty
Properties suffering ongoing structural movement or insurance claims
Grade I & Grade II* listed properties
Back-to-back/cluster homes
Properties located within 20m of a mine entry/feature
Properties within 100m of above ground high voltage electrical supply apparatus (excluding small substations)
Properties subject to compulsory purchase orders
Large flying freeholds (greater than 20% of floor area)
Japanese knotweed located within or immediately adjacent to the site, defined as category 4, 3 or 2 in RICS paper IP 27/2012
Properties without an internal WC, bathroom or kitchen
Properties subject to any onerous occupancy restrictions, including agricultural
Shared ownership/shared equity schemes (only acceptable if applicant will own 100% of the interest on completion)
Properties subject to enforcement notices
Crofting properties/land
Self-build properties
Properties with a commercial element
Non-standard construction

Flats/Maisonettes:

Flats in local authority or ex local authority owned blocks
New build flats/maisonettes
Flats with a gross external floor area less than 35m²
Flats above commercial premises
Studio flats
Freehold flats
Balcony access

Non-standard construction:

Flooding:

Properties at significant risk of flooding or that cannot be suitably insured will not be considered

Restrictive covenants:

We are unable to consider any property with a restricted occupancy clause within the planning permission. For example, it can only be occupied for a maximum of 11 months in any one year
Similarly, property that can only be used for retirement or sheltered accommodation is not accepted. This is the same for any property where a planning restriction (e.g. agricultural restriction) effectively limits a property’s appeal on the open market
Please note: for new builds we do consider Section 106 planning obligations
We are unable to consider properties within a pre-emption period

Documentation

Application requirements

Full mortgage application:

Original ,fully signed and dated declaration
Signed and dated direct debit mandate

Proof of deposit (purchase):

Bank statements from applicants(s)
Interest waiver letter from donor where gifted deposit

Use of funds (remortgage with a further advance):

Breakdown of use of funds, after any debts have been discharged
Account details and balance of any debts to be repaid

Proof of address & identification:

Any two documents from Table 1 or
One document from each table

Table 1	Table 2
Valid passport	Valid (old style) full UK driving license
Valid photo card driving license (full or provisional)	Recent evidence of benefit entitlement
National identity card	Instrument of a court appointment
Firearms certificate or shotgun license	Current council tax demand letter or statement
Identity card issued by the Electoral Office for Northern Ireland	Non-internet generated bank statements and utility bills

Proof of income – employed:

Paid monthly – latest 3 consecutive months with P60 and bank statements
Paid weekly – latest 6 consecutive weeks with P60 and bank statements
Bonus or commission acceptable provided that it is paid weekly/monthly
Quarterly and annual bonus & commission acceptable at 50% provided evidence of 2 years previous payments is received

Proof of income – self-employed:

Sole trader – minimum 1 year’s accounts or SA302s with 3 months’ business bank statements
Company director – minimum 1 year’s accounts with 3 months’ business bank statements

Other sources of income:

Child Benefit – latest notice with bank statements (must be payable for at least the next 5 years)
Working or Child Tax Credits – full award notice with bank statements
Maintenance – a copy of the maintenance agreement, received under a Court Order, a CSA assessment or a written private agreement drawn up between the separating parties and 6 months’ bank statements as evidence of payment
State Pension – latest annual statement of pension/due on retirement
Pension Credits – latest Pension Credit Award Notice
Private pension – latest annual statement of pension/due on retirement or
Latest payslip from pension provider or
Latest letter from pension provider confirming pension due on retirement

Rental/mortgage history:

Tenancy agreement with 12 months’ bank statements confirming rental payments

Last 3 years’ mortgage statement Confirmation of mortgage payments:

To support the re-mortgage and to verify that the applicant is not experiencing financial difficulty and able to meet their mortgage repayment a copy of the latest bank statement evidencing payment of the last months mortgage payment should be provided.

Unacceptable applicants:

Currently in receipt of Coronavirus Job Retention Scheme (CJRS)
Currently in receipt of the Self Employment Income Support Scheme
On a mortgage payment holiday with their current lender

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