Coronavirus support for Platform mortgage brokers
18 May 2020
We understand that your customers may have questions and concerns at this uncertain time. Here, you can find information about the latest developments.
Changes to our mortgage valuation process through the coronavirus crisis
Following the latest Government advice on Sunday 10 May and further clarification along with updated guidelines, our valuation partners will be able to carry out physical inspections of properties in England from Monday 18 May.
We are awaiting further guidance on properties in the rest of the UK and we will continue to carry out desktop valuations where we can.
Our focus over the short term will be to work applications that are currently on hold as quickly and safely as possible, we will complete valuations in date order with the oldest applications being booked first.
Please ensure you advise us of any material changes to your clients’ circumstances. In addition, if your client no longer wants to proceed with the mortgage application please let us know as soon as possible so we can prioritise applications that are progressing.
The safety of our customers and valuers remains our number one priority. Valuations will be completed in line with government guidance and will involve a detailed safety assessment. We understand that some customers will not feel comfortable letting a valuer into the property at this time, where this is the case we will attempt a desktop valuation or place the valuation on hold where this is not possible.
Desktop Valuations Criteria:
- Residential remortgage and revaluations up to 80% LTV
- Residential purchase up to 75% LTV
- Max Property Limit - £1m Greater London and £750k elsewhere
Key exclusions will be:
- BTL applications above 60% LTV
- New Build
- Non-standard construction
- LTV above 80% for re-mortgage and above 75% for purchase
In a small number of instances, it may not be possible to complete a desktop valuation for cases that meet the criteria outlined.
Unfortunately, due to the nature of homebuyers reports and buildings surveys these instruction types will not be possible at this time.
Registers of Scotland closure of Application Register
The Law Society of Scotland has introduced interim measures to address the issues arising from closure of the Application Record.
The Co-operative Bank have worked with the provider of our free remortgage proposition and are now able to introduce these interim measures allowing Scottish remortgage cases to complete as planned.
Guidance for supporting furloughed applications during coronavirus
Changes have been made in the following areas which should be read before progressing with an application. Alternatively call our Mortgage Desk on 0345 070 1999 hours of opening are Monday to Friday 09.00 – 17.00 and Thursday 10.00 – 17.00 to discuss your application with the team (call charges).
New application changes
- Use furloughed or self-employed income support scheme (SEISS) income
- Case will be fully underwritten for affordability
- Payslips should show furloughed income where appropriate
- Self-employed applicant require government confirmation showing income
- For an affordability failure or held valuation you can pause the application
Criteria employed applications
We may accept the application, subject to the following:
- 80% of their basic income up to a maximum of £2,500 pm (£30k per annum gross) evidenced via payslip
- No overtime, commission or bonus will be considered
- No shift/car/location allowances (such as London Weighting)/TLR unless considered feasible and can be evidenced
- Where the employer is funding a top up to the furloughed amount, with evidence, this can be considered.
Criteria self-employed applications
We may accept the application for clients being supported by the SEISS subject to the following:
Sole Trader and Partnerships
- SEISS will pay monthly grant of 80% of the last 3 years average profits. Where there’s evidence of this being paid we will accept the 80%.
- If evidence cannot be provided or if the claim has not yet been made the previous year’s profit history will reviewed and the lowest figure used.
- Director with 25% or more shares in limited company we will use 80% salary being claimed.
- No dividend income can be used.
Note: Maximum of £2,500 pm based on average maximum income of £50k.
If your applicant has two jobs with different employers the government guidance stipulates:
- You can be furloughed by one employer and continue to work for another, if it is permitted within your employment contract.
- If put on furlough by more than one employer, you’ll receive separate payments from each employer. The 80% of your normal wage up to a £2,500 monthly cap applies to each job.
For further information on the Government furlough scheme please refer to GOV.UK.
Extensions to mortgage offers
In light of the current situation relating to coronavirus, the Ministry of Housing, Communities & Local Government have issued guidance advising buyers and sellers to be more flexible on moving dates and completions. They have also requested that banks extend mortgage offers where a delay in completion takes place due to coronavirus.
UK Finance have issued guidance stating that “to help home movers impacted by Covid-19, mortgage providers will give customers who have exchanged contracts the option to extend their mortgage offer for up to three months, to enable them to move at a later date”.
As delays in the house buying process are anticipated, The Bank will offer customers extensions of up to 3 months on the current 6 month validity period, in line with this guidance.
Due to the current situation relating to coronavirus and social distancing measures brought in by the government, some applicants have been unable to obtain documentation e.g. from their employer given that all non-essential businesses are closed. Physical valuations have also ceased.
To support these customers, The Bank will offer a 1 month extension on providing supplementary offer documentation as per the below. The Bank currently allows offer documentation to be valid for 6 months to support an offer to a customer before requesting renewed documentation. This will now be extended to 7 months.
The following documentation has a validity period and will be offered the 1 month extension where required:
- Signed application form
- Employer/accountant’s reference
- Bank statements
- Pay slips
- Valuation report
- Credit Search