THE INFORMATION ON THIS WEBPAGE IS FOR THE USE OF PROFESSIONAL INTERMEDIARIES ONLY

These guidelines are designed to give general guidance to mortgage brokers on the Melton’s lending criteria. The guidelines summarise our minimum high level criteria required as part of our mortgage underwriting process. In addition, the Melton applies a number of other credit assessment tools which may result in an application being declined, despite appearing to meet the guidelines documented.

The Melton reserves the right to change its lending policy at any time, however, we aim to ensure this document reflects the Society’s current approach to mortgage lending.
Please note the Society will lend in England and Wales only. All underwriting is carried out manually. For all mortgage applicants the Society uses a credit reference agency to complete a voters roll search together with a credit search.

Download Lending Criteria Guidelines

 

If you would like to search our criteria by word, please use the CTRL+F buttons to find the word/s you are looking for.


Contents

Loan type & sizes

Maximum Loan

  • As specified in product literature

Maximum Loan To Value

  • As specified in product literature
  • LTV based on the lower of the purchase price or valuation
  • Advances in London are subject to a maximum of 60% LTV

Minimum Loan

  • £25000 (unless otherwise stated on product literature)


Mortgage types

Purchase

  • Permitted

Remortgage

  • Permitted on properties which have not been subject to sale or remortgage in the preceding six months with the following exceptions:
    • Inherited properties
    • Self-build properties
    • Properties to be renovated
  • Loan purposes considered:
    • £ for £ remortgage
    • Capital raising for home Improvements
    • Capital raising for debt consolidation up to 75% LTV**

** Where a loan is advanced that consolidates other debts, payment will be made directly to the borrower’s creditors to ensure that commitments are repaid.
Where the debt consolidation is greater than 50% of the mortgage, this will need to be referred to us for consideration.

  • Where funds are being raised in addition to any loan being remortgaged and those funds are more than 10% or more of the value of the property, additional checks will be carried out to verify the purpose of that borrowing
  • Where a loan is made for home improvements exceeding £10,000, the details of those home improvements will be verified
  • Loans to raise capital for purposes, other than for home improvement and debt consolidation (e.g. cars, caravans, school fees) may be considered subject to the term of the loan being in line with the expected life of the asset
  • The following types of loan will not be considered:
    • Loans to repay gambling debts
    • Loans for holidays
    • Loans for business purposes
    • Loans for wedding expenses

Right to Buy

  • Permitted on selected products only
  • The maximum loan considered is 100% of contractual purchase price up to a maximum of 65% LTV
  • Rent paid by housing benefit within the last 12 months is not acceptable

Shared Ownership

  • Permitted
  • The maximum loan to value ratio considered by the Society is 95% of the share being purchased subject to a maximum of 75% of the value of the property for the purposes of staircasing (maximum 60% LTV for new build flats)
  • Society will only lend on 25% of affordable scheme housing on any single development subject to a cap of 10 properties

Short Term Lending

Permitted in line with general criteria secured against borrower’s prime residential property to max 60% LTV. Short term loan purposes considered:

  • Assist in purchase of a new residential property whilst awaiting sale of the existing property
  • Residential development finance on another property
  • Self build
  • Purchase a residential property where a term of less than 5 years is required


Mortgage terms

Minimum Term

  • 5 years

Maximum Term

  • 40 years


Repayment strategy

Capital and interest

  • Permitted

Interest only

  • Permitted on specific products – refer to product guide
  • Maximum LTV 60%
  • Minimum equity £135,000

Repayment strategy:
Must be held in the UK in £ Sterling. Repayment strategies held outside the UK or not in £ Sterling are not acceptable

Endowment policy

  • Projection from the provider based on current value and contribution levels
  • The Group will use the projected value based on the lowest of the standard growth assumptions set down by the Regulator as the amount that can be used on interest only
  • Term must coincide with or mature before expiry of the mortgage term

Commutable sum from pension

  • Projection from the provider based on current value and contribution levels
  • The Group will use the projected value based on the lowest of the standard growth assumptions set down by the Regulator as the amount to be used to calculate the maximum cash lump sum that can be taken
  • Term must coincide with or mature before expiry of the mortgage term. It must be both legal and practical for benefits to be taken at the end of the mortgage term

ISA

  • Projection from the provider based on current value and contribution levels
  • The Group will use the projected value based on the lowest of the standard growth assumptions set down by the Regulator as the amount that can be used on interest only
  • Where the investment is a cash ISA (or other cash based deposit), a calculation should be carried out based on the current value and contribution levels to assess whether there is likely to be sufficient to repay the proposed interest only amount at the end of the mortgage term. The interest rate used in the calculation will be prudent
  • Term must coincide with or mature before expiry of the mortgage term

Realisation of other assets/Investment properties

  • Ownership and value of assets must be able to be established together with details of any encumbrances. The value of the assets subject to any encumbrances must be sufficient to repay the loan in full at the end of the mortgage term. Assets must be held in the UK in £ Sterling

Downsizing

  • Equity of at least £135,000 must be available in the property. Subject to assessment of feasibility based on full details of applicant’s plan to move including estimate of date, location and type of property the applicant intends to move to

For Buy to let applications, the repayment strategy could be sale of the property

Part and Part combined

  • Permitted on specific products – refer to product guide
  • Maximum LTV 60%
  • Minimum equity £135,000
  • Repayment element of a part interest only mortgage can count towards the minimum £135,000 equity

Borrowers aged 55 and over

Borrowers aged 55 and over with an interest only mortgage can remortgage on to a
part and part basis allowing them to reduce their capital and increase their equity to
facilitate them to have a suitable repayment strategy at the end of the term, including
switching to a lifetime mortgage

Switch to a lifetime mortgage is a permitted repayment strategy subject to an
applicants age, property value and LTV. The following criteria applies to this type of
lending:

  • Minimum age 55 at application
  • Max 75% LTV on a part and part basis of which the interest only element can be
    a maximum of 50%
  • No ex local authority properties
  • Minimum equity 100k


Age Requirements

Minimum Age

  • 18 years
  • 25 years – Buy to Let
  • 25 years – Self Build

Maximum Age

  • At least one borrower must be no more than 80 at the end of the mortgage term for residential mortgages. In addition to the checks on income into retirement there is also a requirement for the mortgage to be affordable based only on the younger borrower’s income.
  • The maximum age for family buy to let mortgages is 80.
  • There is no maximum age for standard buy to let mortgages.
  • Where the term of a mortgage would go beyond an applicant’s intended retirement age, or state pensionable age, if earlier, independent documentation is required to demonstrate that the mortgage will remain affordable in retirement. Where the applicant has indicated that their intended retirement age is beyond state pensionable age, we will assess whether this is feasible, given the nature of the job being performed


First Time Buyer

Definition

For the purpose of this policy a first-time buyer is defined as a person who:

  • has never held a mortgage
  • has not held a mortgage in the last three years

Where the mortgage is to be in joint names the FTB definition need only apply to one of the applicants



Residency Status

EU Member Citizens

  • A citizen of an EU member state must be currently resident in the UK with 36 months provable residency and a current valid passport or national ID card
  • A UK citizen returning to the UK after living abroad must have 36 months residency before the Group will consider a mortgage.
  • Individual consideration may be given to members of the Armed Forces, applicants who have been abroad for less than 12 months before returning and those who have maintained a UK address while they were away.

Non EU Member Citizens

  • A non EU citizen must be currently resident in the UK, have 36 months provable residency and a right to stay in the UK by the way of a permanent ‘Right to reside’ OR ‘Indefinite leave to remain’ stamp and a current valid passport


Employment

Employed

  • Applicants must have been employed in their current job for a minimum of 3 months
  • Applicants must have been in continuous employment for 12 months, in the same line of work and having held no more than three jobs in that period
  • Employment within a probationary period is not acceptable
  • Income paid in cash is not acceptable
  • Income paid in a currency other than £ Sterling is not acceptable
  • Maternity leave:
    • Where applicant is currently on maternity leave, they will be asked of their intentions to return to work. Income based on the response (i.e. full-time, part-time) can be taken into account in considering the application. The applicant(s) must be asked to confirm that the mortgage will remain affordable during the remaining maternity leave period
  • Employment by fixed term contract must have:
    • Been renewed at least once
    • Have at least 3 months to run to renewal
    • Have every chance of being renewed

Verification:

  • Income will be verified in all cases by the most recent 3 monthly (or 6 weekly) consecutive payslips
  • A satisfactory employment reference from the applicant’s current employer (and from previous employer(s) if the applicant has had more than one employer in the last 24 months) is required where the LTV exceeds 75% LTV. References will also be required on lower LTV cases to establish, for instance, whether overtime or other payments are regular and likely to continue. The underwriter has discretion to ask for references as they see fit in relation to any application
  • Hand written documents will not be accepted
  • Three months’ full bank statements, evidencing receipt of salary, must be produced in support of each application

Rental Income:
Rental income must be verified by a letter or reference from an ARLA registered agent, or by reference to a tenancy agreement plus proof of 6 months’ rental income evidenced on bank statements

Self Employed

Applicants must have been trading for a minimum period of 24 months

For self-employed applicants and company directors owning 331/3% or more of the company, the following are required:-

  • LTV < 75% – most recent two years accounts or SA302 documents and respective Tax Year Overviews
  • LTV > 75% – most recent two years accounts and an accountants reference

Profits:

  • Stable/increasing net profits: The average pre-tax net profit (or share of) from the latest 2 years accounts provided will be used to calculate income
  • Unstable net profits (i.e. where profit increases and decreases over the three year period, or where profits increase or decrease by 20% or more from one year to the next): a satisfactory explanation must be received from the accountant. Where a satisfactory explanation is received the average of the 2/3 years most recent accounts will be used
  • Declining net profits (more than 20% year on year) are not normally acceptable

The income of company directors will be based on the lower of either:

  • an average of salary and dividend payments in the last two years, or
  • the most recent year’s income

Where the applicants own 100% of the shares in a company then the residual net profit may also be taken into account

Verification:

  • A statement from an accountant con rming the profits before tax for the last 2 years plus a projection is required in all cases where the loan to value exceeds 75%
  • Acceptable Accountants qualifications are ACA, ACCA, ACMA, CPFA, FCA, FCCA, and FCMA*. Other accountancy qualifications may be acceptable but would need to be referred for consideration
  • SA302 documents will only be accepted where the loan to value is less than 75% and income can be validated through bank statements

For professionals:
(Solicitors/Architects/Accountants/Dentists/Doctors/Surveyors/Pharmacists/Vets) a minimum of one years accounts are required as long as they have been working as part of an established partnership of at least two years standing. The maximum LTV will be restricted to 90%.

Sub-Contractors:

  • Sub-contractors must have been in that position for a minimum of 12 months and be able to prove income by reference to accounts prepared by a recognised accountant or by reference to HMRC documentation

*AFA or FFA will be acceptable where the LTV is under 50%



Income Requirements

Income

Applications with more than 2 applicants

  • If there are more than 2 applicants applying for the mortgage with the Society we will use 100% of the first 2 applicants’ income only, except where the additional applicants are immediate family members, in which case we will consider up to 4 incomes, subject to affordability
  • All applicants must be UK Tax Payers and resident the UK. In arriving at eligible income the following may be taken into account:
Basic Salary 100%
Shift Premium 100%
Private Pensions 100%
State Pension 100%
Invalidity and disability benefit 100%
Guaranteed overtime or bonuses 100%
Regular overtime/bonus/commission 50%
Second job 50%
Area Weighting allowance 100%
Car Allowance (only if guaranteed) 100%
Rental income (unencumbered properties) 100%
Rental income (encumbered properties) 100% of any surplus rent above 145% of the mortgage commitment
Maintenance payments (under court order) 100%
Maintenance with no court order 50%
Investment Income 50%*
Foster Care Income 100%**

average of the last two years provable income will be used to calculate the figure to apply the 50% to
** subject to satisfactory evidence/accounts and proof that there has been foster caring arrangements for at least 12 months

  • Where basic salary has been reduced because of salary sacrifice, the amount of income taken into account shall include the amount of salary sacrificed
  • Guaranteed overtime and bonuses must be evidenced by an employer’s reference. Where something is stated to be guaranteed the employer will be asked under what circumstances such payments would not be made
  • Regular overtime and bonuses must be evidenced by at least 3 months wage slips and the latest P60 or an employers reference
  • Commission paid in addition to a basic salary, which forms more than half of a person’s income may be taken into account at a rate of 50%, subject to the latest 3 months pay slips and last 2 years P60’s or an employers reference

Unacceptable Income

  • Unacceptable income includes:
    • Share dividends and interest on savings accounts
    • Temporary employment
    • Travel allowance
    • Child Benefit/Child Tax Credit payments
    • Working Families Tax Credits
    • Expenses
    • Income Support
    • DWP Payments
    • Agency work
    • Income paid in cash
    • Income not paid in £ sterling


Affordability

Affordability

  • The Group bases its lending decisions on the applicant’s ability to repay their loan. To assess affordability please refer to our affordability calculator available on our website


Commitments

Mortgage/ Tenancy

Mortgage:

  • Full details and proof of payments will be required for all current and previous mortgages, including second charges, held in the last 12 months unless Experian Insight information is available
  • We will accept the latest mortgage statement, which must be supported by bank statements showing payments from the statement end date to the application date
  • For let to buy, where current mortgage will remain, rental income must cover the mortgage payments by minimum of 145%. In addition, confirmation will be required from current lender that they are in agreement with the tenancy and a copy of the tenancy agreement will be required

Tenancy:

  • Full details will be required for all current and previous tenancies held in the last 12 months
  • Confirmation of rental payments will be verified by bank statements

Expenditure

Regular commitments in respect of loans, credit cards, hire purchase agreements, mail order, maintenance etc. will be deducted from income as follows:

  • Loans, hire purchase, maintenance – Annual payments made
    (Loans with less than 12 months to run may be disregarded, provided the aggregate monthly payment does not exceed 10% of net monthly income)
  • Credit cards and mail order commitments – 60% of outstanding balance (5% of outstanding balance X 12)
    Where the aggregate total of credit card and mail order balances is less than £1,000 – these may be disregardedWhere credit card balances are repaid in full each month – The amount should be covered by expenditure items rather than be deducted from income
  • Child care costs – will be included in the affordability calculation
  • Negative capital – For self-employed applicants, any negative capital disclosed in the accounts or accountant’s reference will be treated as a commitment
  • On other encumbered properties any shortfall (i.e. where the rental income is less than 145% of the borrowing commitment) will be treated as a commitment

Payday loans shall be treated as follows –

  • If there has been a single instance of a payday loan in the last twelve months and it was less than 10% of monthly net salary, this can be disregarded if a satisfactory explanation is received
  • If a payday loan has been obtained in the last twelve months exceeding 10% of monthly net salary, the loan will be declined
  • If more than one payday loan, of any amount, has been obtained in any of the most recent three months, the loan will be declined

In all other cases the highest payday loan obtained in the last twelve months will be treated as a monthly commitment



Impaired Credit

Criteria

The Society will consider residential applications where there is historic Impaired Credit/CCJ/IVA/Bankruptcy/Debt Management Plan/Debt Relief Order where these were settled more than four years ago*. Applications will not be considered where repossession has previously occurred. In addition, the following criteria regarding an applicant’s credit history will be considered:worst

Existing Homeowners Excluding Self Build applications – no missed mortgage payments in the last 2 years Existing Homeowners Excluding Self Build applications – have missed a mortgage payment in the last 2 years First Time Buyers/Self Build
Unsatisfied CCJs Must not exceed £500 in total Not acceptable Not acceptable
Satisfied CCJs Total must not exceed £1,000 and they must have been satisfied for more than 3 years Total must not exceed £500 and they must have been satisfied for more than 3 years Total must not exceed £500 and they must have been satisfied for more than 3 years
Unsatisfied Defaults Must not exceed £500 in total Not acceptable Not acceptable
Satisfied Defaults Total must not exceed £1,000 and they must have been satisfied for more than 3 years Not acceptable except defaults with communications suppliers which have been satisfied may be disregarded at the discretion of the mandator Not acceptable except defaults with communications suppliers which have been satisfied may be disregarded at the discretion of the mandator
Missed payments on unsecured commitments, credit card, mail order, communications supplier or similar Max worst status of 1 on current active CAIS in the last 6 months and a max status 2 in the last 2 years Max worst status of 1 on current active CAIS in the last 6 months and a max status 2 in the last 2 years Max worst status of 1 on current active CAIS in the last 6 months and a max status 2 in the last 2 years
Mortgage Arrears None in last 2 years Must not have exceeded 1 month’s payment in the last 2 years None in the last 2 years

* Buy to let applications will not be considered if there is any form of impaired credit.



Deposit

Type

  • Builders’ and vendors’ deposits of up to 5% of purchase price permitted. Such incentives are to be deducted from the purchase price so that the loan is calculated upon the lower of the discounted purchase price or valuation
  • Gifted deposits as an incentive from the vendor or other connected person, including builders’ deposits, up to a maximum of 5% of the purchase price are permitted
  • Parental gifted deposits are acceptable up to a maximum of 50% of purchase price
  • Gifted equity is considered by referral

Verification:

  • In respect of property purchases the source of the deposit must be verified by written confirmation
  • Deposit from a gift from a family member or other third party, such as a builder, written confirmation of the gift will be required from the donor


Security

Property Types

  • The following types of property are acceptable as security:
  • Properties in England and Wales only
  • Property with a minimum valuation of £90,000
  • Property in shared ownership
  • Owner occupied private dwelling

Acceptable security types:

  • Houses:
    • Detached/semi-detached/terraced/townhouse/bungalow built of traditional construction, i.e. brick or stone walls and tiled or slated roof
    • New build houses subject to maximum LTV of 90%
    • Flat roofed properties will be considered although for older properties the valuer’s comments will be specifically sought
    • Properties with agricultural or equestrian ties may be considered by referral up to a maximum of 65% LTV
  • Flats:
    • Purpose built leasehold flats or maisonettes
    • Maximum 4 storeys
    • Leasehold with remaining term on the lease of 70 years at the end of the mortgage term
    • New-build leasehold flats subject to a maximum LTV of 60%
    • Flats in converted houses may be acceptable if the conversion has been done to a professional standard. Such mortgages would be subject to initial referral for consideration
    • Ex local authority flats will only be considered with a maximum of 4 storeys, no more than 12 flats in the block, no balcony access, not in London and in an area where the number transferred into private ownership is more than 40%
  • New build acceptable warranty:
    • NHBC
    • BLP Secure
    • Premier Guarantee
    • Buildzone
    • Q Policy
    • Protek
    • Castle 10
    • ICW
    • Advantage HCI Limited

Unacceptable Security

  • The following types of property are not acceptable:
  • Properties of non-standard (classed as defective under the Housing Act) construction
  • Freehold flats
  • Studio flats
  • Bedsits
  • Houseboats
  • Property adversely affected by subsidence
  • Property in a derelict condition
  • Multiple occupancy properties
  • Properties with a value of less than £90,000
  • Properties described in the valuation report as being unsuitable for mortgage purposes
  • Properties with flying freehold in excess of 15% of floor area
  • Properties attached to commercial premises
  • Ex-local authority houses in an area where the number transferred into private ownership is less than 40%
  • Farms/Small holdings
  • Restricted properties
  • Properties which are affected by Japanese Knotweed
  • Conversion of steel framed commercial premises to residential
  • Properties which are in effect ‘temporary construction’

Loans on properties which have been subject to sale or remortgage in the preceding six months will not normally be accepted with the following exceptions:

  • Inherited properties
  • Self-build properties

Non Standard Construction

Any properties of non-standard construction or defective construction as defined under Housing Act 1985 listed below will not be considered:

  • Airey
  • Boot
  • Boswell
  • Butterley
  • Cornish Type 1
  • Cornish Type 2
  • Dorran
  • Dyke
  • Gregory
  • Hawksley
  • Laing Easi Form
  • Lileshall
  • Myton
  • Mundic
  • Newland
  • Orlit
  • Parkinson Frame
  • Remma Hollow Panel
  • Schindler
  • Smith
  • Stent
  • Stonecrete
  • Terran
  • Underdown
  • Unity
  • Waller
  • Wates
  • Wessex
  • Wimpey no fines
  • Winget
  • Woolaway

Where appropriate for properties of non-standard construction not covered by the list above a referral will be made to the Group’s Valuer Panel manager for further advice relating to the construction type



Standard Application Requirements

Evidence

A list of our standard application requirements can be found on our website: www.themeltonbrokers.co.uk



Solicitors

Panel

The Group operates a panel of solicitors and licensed conveyancers, which is managed by LMS. New firms may be added to the panel subject to each firm satisfactorily meeting our requirements; having two or more partners (i.e. sole practitioners are not acceptable), minimum PI insurance of at least £2 million, carry out a minimum of 120 conveyancing cases per annum and be CQS/CLC listed



Buy to Let

Buy to let applications will be considered in line with general criteria and in addition the following will also apply:

Minimum Age

  • 25

Maximum Age

  • 80 for regulated BTL.
  • No maximum age for standard BTL

Income

  • Minimum earned income of £25,000 between both applicants
  • Income evidence in accordance with our standard proof of income requirements

Portfolio

A maximum portfolio of 3 properties in total in mortgage to the Society or other lenders will be allowable to an individual or connected counterparty. Full details must be obtained from the applicant and details verified, as far as possible, to the loans reported on the credit search

The maximum that may be lent to any individual or connected counterparties is £500,000 in aggregate

Security

The Society will not consider BTL lending on leasehold properties

The EPC rating for the property must have a minimum of grade E

Type of Buy to Let

  • Consumer Buy to Let – this is when you have lived in the property as your main residence or you inherit a property that was a main residence and then due to a change in circumstances you choose to let the property and you receive no other rental income. Intermediaries must hold appropriate FCA permissions
  • Regulated Buy to let – this is when you or a menmber of your family will at some stage be a tenant (this also applies to Holiday Buy to let where you or a family member expect to rent the property at some stage)
  • Business Buy to let – this is where the transaction does not merit either of the criteria above and is purely a business transaction to generate income and yield

Consumer Buy to Let

Rental Cover & Affordability

  • Gross rental income must cover the mortgage payment (calculated at the Society’s BTL stressed rate on an interest only basis) by a minimum of 145%, calculated after assuming no void periods after taking into account any other borrowings. Evidence of actual or anticipated rental income is obtained by reference to a mortgage valuation report. Rental income declared will be compared to the estimated rental figure provided on the valuation report and the lower of the two will be used to assess the 145% coverage

Regulated Buy to Let

Rental Cover & Affordability

  • Gross rental income must cover the mortgage payment (calculated at the Society’s BTL stressed rate on an interest only basis) by a minimum of 145%, calculated after assuming no void periods after taking into account any other borrowings. Evidence of actual or anticipated rental income is obtained by reference to a mortgage valuation report. Rental income declared will be compared to the estimated rental figure provided on the valuation report and the lower of the two will be used to assess the 145% coverage

Business Buy to Let

Rental Cover & Affordability

  • Gross rental income must cover the mortgage payment (calculated at the Society’s BTL stressed rate on an interest only basis) by a minimum of 145%, calculated after assuming no void periods after taking into account any other borrowings. Evidence of actual or anticipated rental income is obtained by reference to a mortgage valuation report. Rental income declared will be compared to the estimated rental figure provided on the valuation report and the lower of the two will be used to assess the 145% coverage

Holiday Let

Gross rental income must cover the mortgage payment (calculated at the the Society’s BTL stressed rate on an interest only basis) by a minimum of 130%. For the purpose of HBTL, gross rental income shall be;

  • In the case of an existing holiday let (purchase or remortgage), a minimum of one year’s gross rental income verified by an approved accountant, or
  • In the case of a new holiday let, confirmation of potential income and the % occupancy rate from a letting agent with relevant experience in the area of the property, taking 40% as a maximum occupancy rate or the letting agents figure, if lower

The property must be free of any planning restrictions that limits use to holiday home use only

Details of any company managing and/or marketing the property will be required

The requirement for an assured shorthold tenancy agreement is not applicable

Family Assist for Students

Gross rental income must cover the mortgage payment (calculated at the
Society’s BTL stressed rate on an interest only basis) by a minimum of 145%,
calculated after assuming no void periods after taking into account any other
borrowings. Evidence of actual or anticipated rental income is obtained by
reference to a mortgage valuation report. Rental income declared will be
compared to the estimated rental figure provided on the valuation report and the
lower of the two will be used to assess the 145% coverage

  • ICR calculated will be based on rent from the remaining let rooms only exclusive
    of room occupied by child
  • Maximum 3 bedrooms
  • Parents can buy a property for their child to reside in whilst attending education
    with remaining rooms being let to other students or young professionals on a
    single AST
  • Property must be within 15 miles of the higher education campus being attended

AST

Assured Shorthold Tenancy agreements with a minimum of 6 months and a maximum of 12 months are required. Tenants in receipt of housing benefit are not acceptable



Self Build

Self build applications will be considered where the applicant intends to reside in the property in line with general criteria and in addition the following will also apply:

Minimum Age

25

Security types

The Society will lend on freehold houses and bungalows, but not on flats

1. Society Standard
The Society will consider loans to individuals requiring funds to purchase land with full planning permission and building regulations approval for a residential property and for the construction of a residential property with monies being released in stage payments in arrears

2. Society Advance
The Society will consider loans to individuals requiring funds to purchase land
with at least outline planning permission for a residential property and for the construction of a residential property with monies being released in stage payments in advance

Full details including plans, cost estimates, schedule of works and timescales must be obtained

Loan terms

1. Society Standard
The maximum term for a mortgage is 40 years. The maximum loan to value ratio will be as specified in product literature

If the applicant intends to remain in their current house for more than 6 months from the inception of the mortgage, a minimum of 12 current monthly mortgage or rent payments will be deducted from income

2. Society Advance
The maximum term for a mortgage is 40 years. The maximum loan to value ratio is as specified in product literature

If the applicant intends to remain in their current house for more than 6 months from the inception of the mortgage, a minimum of 12 current monthly mortgage or rent payments will be deducted from income

Family Assist

Parents can provide the deposit, which is then repaid to them as a final stage payment on completion of the build, subject to the final end value being 75% or lower

Available as part of our Society Standard proposition only

Affordability will be based on full borrowing, including the last stage release

Maximum 75% of land and build costs

Deposit donor letter required on application confirming that the funds are only repayable on completion of the build, subject to the final end value being 75% or lower

Refer to product guide for details of minimum and maximum loan amounts

Repayment method

Applicants may opt to be charged interest only during the build and switch to repayment or part and part post build

Insurance

Site insurance must be in place at the time of completion and must cover as a minimum:

  • £5m Public Liability
  • £10m Employers Liability
  • Contract works for the re-instatement value
  • Reinstatement for any existing structure
  • The Society’s interest noted as mortgagee

Title insurance will be arranged to protect against defective title and/or planning consents and permissions

Valuation

1. Society Standard
We will lend up to 75% of the land value and build costs with funds being released in arrears of each stage of the build

Typically the advance will be released in stage payments against an appropriate interim certificate from an architect, architectural technologist, structural engineer or RICS surveyor (minimum PI cover of £1m is normally required). Monies will normally be released at the following stages of construction with stage releases not exceeding £100,000 for any single stage release. The valuer appointed by the Society will be required to carry out reinspections at the following stages of construction (as a minimum):

  • Land with full planning permission and building regulations approval
  • Foundations
  • Wall plate
  • Wind and watertight
  • Completion

2. Society Advance
We will lend up to 85% of the land value and build costs providing it does not exceed 75% of the end value with funds being released in advance of each stage of the build

The first release for land will be made subject to receipt of outline planning permission

Full planning permission and building regulations will be required prior to release of any subsequent stage payments

For subsequent stage payments release will be made against an appropriate interim certificate from an architect, architectural technologist, structural engineer or RICS surveyor (minimum PI cover of £1m) and will not exceed £75,000 for any single stage release. The valuer appointed by the Society will be required to carry out reinspections at the following stages of construction (as a minimum):

  • Foundations
  • Wind and watertight
  • Completion


Product Guide

Our current range of mortgage products available for download in PDF format.

Download product guide

Lending Criteria

Guidelines designed to give general guidance to mortgage brokers on the Melton’s lending criteria.

Download criteria guide

Literature & Useful Info

View our range of helpful guides and literature.

Find out more

FAQ’s

Search our FAQs for any questions you may have.

Search our FAQ’s