Application and policy requirements

Main residence with buy-to-let in the background
(including let to buy where the mortgage applied for will be on a new main residence)

For ALL applications where the customer’s existing mortgage commitments include any element of buy-to-let properties, including main residence applications with buy-to-lets in the background, please complete and send us the Additional Mortgages form alongside the application in C&G Caseflow or C&G Mortgage Application Form.

 

Main residence application and the customer has buy-to-lets with another lender

 

Under the lending policy for C&G mortgages, buy-to-lets with another lender will not affect the main residence application if:

 

• the customer's Lloyds Banking Group (excluding HBoS) mortgage commitments are £500,000 or less
• none of the mortgages are currently in arrears
• the customer’s total mortgage commitments are less than £2 million.

Main residence applications where existing buy-to-lets are with the Lloyds Banking Group (excluding HBoS)

 

• calculate that the customer’s mortgage commitments – based on the total portfolio of exposure/properties with the Lloyds Banking Group (excluding HBoS) – are self-funding using a notional interest rate of 8%
• submit the application on C&G Caseflow, complete the Additional Mortgages form showing these calculations and fax the form to your regional processing team on 0845 600 2367, ensuring that the case reference and name are included on the fax cover sheet.

Where an element of those mortgage commitments is or will be made up of buy-to-let mortgages, these applications will be referred to underwriters. In these instances, when a customer applies for residential borrowing, underwriters will calculate the affordability of any buy-to-let property using a notional 8% interest rate.

 

Note: Applications with a self-funding buy-to-let will normally trigger an affordability decline on C&G Caseflow where the rental income hasn't been included; however cases can be appealed for referral to underwriters if supporting financial information is provided.

 

How to enter a main residence application with self-funding buy-to-let properties in the background on C&G Caseflow

 

Please refer to the policy above to see if your case fits criteria. If your case doesn't meet this criteria please follow all the steps detailed below. If it meets this criteria you will not need to include rental income on the income page of the application, but you must follow steps 2-4.

 

1. You must include all annual rental income against Applicant 1 on the occupation page under the income section by clicking ‘add income’ and selecting ‘rental income from other properties’. In the case of joint applications, enter zero for Applicant 2
2. On the outstanding balances’ page, you must include any outstanding mortgages for the buy-to-let properties, together with any existing mortgage on a main residence.
3. On the ‘product details’ page, in answer to the question ‘discount special scheme details’, select ‘other/self funding BTL’. A free format box will appear and you should enter details of the self-funding buy-to-let properties in the background.
4. Please ensure you also complete and send us the Additional Mortgages form and fax to 0845 600 2367.