Coventry Mortgages Lending Policy

Where the mortgage term exceeds the applicant's 70th birthday, see Applicants that will exceed age 70 during the mortgage term for further information.

Where the applicant's age at application is 56 or older, refer to Income multiples.

To find out the minimum age for applicants applying for products from our first time buyers product range please see First time buyer product-specific criteria.

To find out the minimum age for Buy to Let applicants please see Godiva mortgages lending policy for our Buy to Let criteria.

Applicants must have no bankruptcy or IVAs currently registered against their name. Applications may be considered from applicants (excluding first time buyers) who were previously bankrupt or subject to an IVA, provided that they have been fully discharged/ completed for at least six years.

All self-employed applicants must be able to provide proof of income over a minimum of a two year period (one year for Buy to Let applications).

Please see Income for details of the income sources we accept.

Total gross income is made up of:

• Basic salary.
• 100% of gross guaranteed overtime, bonuses (excluding annual bonuses) or shift allowance.
• 100% of annual non-pensionable allowances forming an integral part of the remuneration package e.g. London weighting allowance, car allowance. Car allowance must form an integral part of the remuneration package and must not include expenses paid out by and refunded to the applicant e.g. mileage allowance. Expenses such as travel payments and meal allowances are not acceptable.
• Up to 50% of regular overtime, bonuses (excluding annual bonuses), shift allowance or commission.

We define gross annual income as the applicant's share of net profit.

Total gross income is made up of:

• Basic salary.
• 100% of gross guaranteed overtime, bonuses (excluding annual bonuses) or shift allowance.
• 100% of annual non-pensionable allowances forming an integral part of the remuneration package e.g. London weighting allowance. Please note that expenses such as mileage payments and meal allowances are not acceptable.
• Up to 50% of regular overtime, bonuses (excluding annual bonuses), shift allowance or commission.
• 50% of the average annual dividends over the previous 2 years.

Directors with a 20% or more share in the company they work for:

Applicants must be able to provide proof of income over a minimum of a two year period (one year for Buy to Let applications).

We define gross annual income as the applicant's share of net profit (before dividends) of the company together with salary taken. The salary must have been deducted before arriving at net profit.

We define gross annual income as net profit - the applicant's share of net profit before dividends for partnerships.

Gross income is made up of the basic salary.

We do not accept applications from agency workers.

• The applicant has a permanent right to reside in the UK
• The property is the main permanent residence of the applicant
• The property must be occupied in order to meet normal insurance terms

The following sources of income are acceptable:

• State retirement pension
• Private pension
• Company/Occupational pension

In these circumstances we will apply our income multiples to the lower of the following:

• Current annual income minus any financial liabilities,
  
  or
• Future acceptable pension income disregarding any existing financial liabilities

• State retirement pension (SRP)
• Private pension
• Company/Occupational pension
• Drawdown on pension fund
• Interest income from investments
• Dividend income from a portfolio of shares
• Dividend income from an applicant that owns a share in a business
• Income from a company the applicant owns that will continue to provide an income into retirement
• Rental income

We accept the following sources of secondary income:

• State retirement pension (SRP)
• Private pension
• Company/ Occupational pension
• Rental income where the applicant can confirm that the income is derived from a business, can provide two years accounts (one year for Buy to Let applications) or two SA302s and meet all other self-employed criteria.

We do not accept the following sources of secondary income:

• Income from temporary employment
• Child/ working family tax credits
• Disability allowances
• All other state benefits
• Maintenance (including court ordered)
• Bursaries and other educational subsidies
• Foster income
• Rental income where it is secondary income that is not derived from a business

Please note that this list is not exhaustive and any similar income source may be declined.

We will consider more than one income for each applicant, provided each income derives from permanent employment or a professional source.

We will not include any ongoing financial liabilities that have less than six months to run.

*Maximum age is up to the applicant's 70th birthday, unless they have adequate retirement income which would allow borrowing up to the applicant's 75th birthday. Maximum age is calculated by deducting the age of the applicant at their next birthday from the maximum age. See Applicants that will exceed age 70 during the mortgage term for further information.

For joint applications, select the multiplier based on the income of the higher earner and apply it to the total admissible income of both applicants.

The amount we may lend depends on the loan to value and the purpose of the mortgage.

A minimum deposit of £1,500 or 15% of the purchase price, whichever is higher, must be provided from the customers own resources. This will have the effect of reducing the loan to value percentage allowed on lower value properties.

These are the maximum LTV limits we apply. Certain products may have restricted loan to value criteria in which case the lower LTV will be applied.

If there is an element of interest only, the loan to value limit may be affected. Please see Interest only for further details.

For remortgages, if the remortgaged property is unencumbered or there is less than £5,000 outstanding on the current mortgage the maximum LTV is 50%.

First time buyer products may offer a higher loan to value than outlined in the standard loan to value criteria above.

For first time buyers the only payment method is repayment (capital and interest). Interest only mortgages are not acceptable. For more information see First time buyers products.

Where there is an element of interest only the loan amount is restricted to £500,000. Any loans above £500,000 must be on a repayment basis only.

Where any element of the loan is interest only, these are restricted to 50% LTV. Any loans above 50% LTV must be on a repayment basis.

The repayment plan used for a mortgage with an interest only element must have been in place for at least 12 months prior to the application being submitted.

We accept the following repayment plans:

• ISAs (PEPs)
• Endowment policies
• Pensions (lump sum value)
• Unit and Investment Trusts
• Savings
• Premium Bonds
• UK FTSE listed securities

Property sales are not an acceptable repayment plan, for example, downsizing or the sale of a second property.

We may ask for additional information and/or documentary proof of any repayment plan. The additional information provided will be used to assess how suitable the repayment plan will be in repaying the loan.

It is the customer's responsibility to ensure that their repayment plan performs adequately; we will not guarantee that the repayment plan will repay the loan.

Flats in a block of more than ten storeys will not be considered.

Flats on the fifth storey or above in a block without lift access, will not be considered.

Leasehold is the only acceptable tenure for flats in England, Wales and Northern Ireland. There must be at least 70 years remaining on the lease at the time of application.

We are unable to offer mortgages for freehold flats or maisonettes, studio flats/ apartments, or ex-local authority or ex-housing association flats in blocks that have more than five storeys in total. In addition, the loan to value on ex-council or housing association flats or maisonettes is restricted to 70%.

For applicants applying for products in our Coventry Mortgages First time buyer product range, the extra rules in this section apply.

For applicants applying for products in our Coventry Mortgages First time buyer product range, the following extra rules in this section apply.

All applicants must be first time buyers.
Applicants must be at least 21 years old.

In the case of a joint application, the principal applicant must be at least 21 years old. Both applicants must be first time buyers.

Applicants must have been in continuous employment for at least one year prior to application (in the case of a joint application, both applicants must have been in continuous employment for at least one year, where both applicants' income is being used to calculate admissible income).

Applicants must never have been declared bankrupt or had an IVA registered against their name.

The maximum loan is £250,000. The maximum loan to value is dependant on the specific first time buyer product.

Repayment (capital and interest) is the only acceptable payment method. Interest only mortgages are not acceptable.

The maximum repayment term is 35 years. Where the mortgage term exceeds the applicant's 70th birthday, see Applicants that will exceed age 70 during the mortgage term for further information.

'Step-up' is a product we have designed to help first time buyers get onto the property ladder. The income of a parent, guardian or close relative is taken into account with that of the first time buyer when assessing the maximum loan available to the applicants. It is also for those needing help to buy a new property following divorce or separation (the main applicant). Step-up can be used on all first time buyer and standard residential mortgage products.

This is not a guarantor mortgage (we do not permit the use of a guarantor in any circumstances), as both parties join the transaction as owner and mortgagor.

Eligibility

• The applicant must usually be a first time buyer, though other situations may be considered such as cases of divorce/separation or where the applicant is moving to a more expensive location.
• The other party must be a parent, guardian or close relative.
• The minimum age of all applicants is 21 years.
• The maximum age of the parent or other relative at the date of application is 65 years and the maximum age of the first time buyer at the end of the mortgage term is 75 years.
• All applicants must reside in the UK.
• Properties must be situated in England, mainland Scotland, Wales or Northern Ireland. We will not lend on properties in the Scottish Isles.

Specific Step-up lending policy

• The maximum total loan is £250,000.
• The maximum loan to value is 90% (50% if any element of the loan is interest only). Please note, the interest only payment method is not available to first time buyers. Loan to value is dependant on product availability.
• The maximum repayment term is 35 years.
• The minimum admissible income of the first time buyer is £15,000.
• Loan amount must not exceed 7 times the first time buyer's admissible annual income.
• The first time buyer must have been in continuous employment for at least one year.
• Only the income of one main applicant and one other party may be taken into account.
• Where the mortgage term exceeds the other party's 70th birthday and they are age 56 or over at the date of application, evidence of retirement income is required. Income multiples applied on Step-up mortgages are based on the age of the first time buyer.

Our porting policy varies according to the customer's type of mortgage scheme. Please see Portability (PDF) for details.

If your client is not an existing member of Coventry Building Society, two forms of identification are required (one from each list in the table below) for each applicant.

All documents used for verification must be originals or certified copies of documents that were originally printed at source and posted to the address of the applicant(s). Copies printed from the internet are not acceptable.

Copies of original documents can only be certified by one of the following: independent financial advisor, solicitor, teacher, engineer, accountant, surveyor, police officer, bank/building society manager, minister of religion, Justice of the Peace, post office official, doctor, fire service official, officer of the armed services, nurse, dentist, chemist or optician. Certification of documents of ID and address should only be carried out by someone who is independent of the applicant(s) and cannot be carried out by any family members connected to the applicant(s).

At the point of application, proof of income must be no more than 12 months old.

We may request bank statements on submission of the application.

Please see Which qualifications does my accountant require? for details of which professional accountancy bodies we accept accounts from.

Directors with less than 20% share of the company they work for

We require the latest P60 and latest payslip for each applicant

Directors with 20% share or more in the company they work for

We will request an accountant's certificate directly from the accountant on submission of the application. We may request further information/ clarification directly from the applicant's accountant, please ensure full contact details are provided.

At the point of application, proof of income must be no more than 12 months old.

We may request bank statements on submission of the application.

Please see Which qualifications does my accountant require? for details of which professional accountancy bodies we accept accounts from.

We require the latest two years tax assessments (SA302s). SA302s must be official and are not acceptable where they are printed from the HMRC website.

At the point of application proof of income must be no more than 12 months old.

We may request bank statements on submission of the application.

We require copies of contracts demonstrating continuous employment in contracting over the last two years.

There must be a minimum of six months remaining on the existing contract. If there is less than six months remaining, this is only acceptable if the employer confirms in writing that the contract will be renewed for a minimum of a further six months or provides a copy of the new contract.

Currently employed

We require copies of contracts demonstrating continuous employment in contracting over the last two years.

There must be a minimum of six months remaining on the existing contract. If there is less than six months remaining, this is only acceptable if the employer confirms in writing that the contract will be renewed for a minimum of a further six months or provides a copy of the new contract.

• Pension documents provided must be no more than 12 months old.
• Pension statements must be from the pension provider.
• We reserve the right to request an accountant's certificate to finalise our lending decision.

• Institute of Chartered Accountants (ICA)
• Association of Chartered Certified Accountants (ACCA)
• Chartered Institute of Management Accountants (CIMA)
• Institute of Financial Accountants (IFA)
• Association of Authorised Public Accountants (APA)
• Chartered Institute of Public Finance & Accountancy (CIPFA)
• Chartered Institute of Taxation (CIOT)
• Association of International Accountants (AIA)