Criteria guide

1 Criteria guideBuy to let mortgages INFORMATION IS FOR THE USE OF MORTGAGE INTERMEDIARIES AND OTHER PROFESSIONALS ONLY Follow us 0800 116 4385 Monday- Friday, 9am-6pmCorrect as of: Key updates Maximum LTV increased, now available up to 80%2 SectionPage numberApplicant Criteria 5 Applicant profile (inc. Minimum age, Maximum age, Maximum number of applicants, Guarantors and First time buyers)5 Allowable adverse5 Nationality and residency5 Income Criteria 6 Minimum earned income6 Employed6 Self-employed6 Furlough payments, bounce back loans and CBILS7 Retired7 Additional income7 Deposit criteria12 Source of funds12 Family gift12 Builder s second charge12 Unacceptable sources of deposit12 Affordability10 Interest Coverage Ratio (ICR)

2 10 Bespoke ICR10 Top slicing11 Loan criteria8 Maximum LTV8 Loan term8 Loan size8 Porting8 Portfolio landlords9 Portfolio criteria9 Remortgage applications9 Repayment methods9 Offer validity9 Let to buy9 Contents3 New build criteria18 Definition18 Maximum LTV18 Flats18 Offer validity18 Section 106 planning obligations18 Building warranty18 Refurbishment Buy to Let17 Process17 Criteria highlights17 Examples of what we can assist with17 Multi-Unit criteria16 Definition16 Applicant profile16 Loan 16 Property 16 Houses in multiple occupation (HMOs) criteria14 Definition14 Applicant profile14 Loan14 Property14 First time buyer landlord criteria15 Definition15 Applicants15 Maximum LTV15 Maximum age15 Affordability assessment15 Proof of income - employed15 Proof of income - self-employed15 ContentsLimited Company criteria13 Applicant/guarantor profile13 Company profile13 Maximum number of guarantors13 Maximum term13 Portfolio134 Fees23 Validation22ID and residency documents22 Supporting documents22 Submission requirements24 Documentation guidelines25 ContentsProperty Criteria property types covenents21 Structural reports21 Specialist reports21 Other21 Property criteria19 Minimum property value19 Tenure19 Allowable locations19 Retentions19

3 Inherited properties19 Acceptable tenancies19 Unacceptable tenancies19 Unacceptable property types195 Applicant profileIndividualLimited CompanyMinimum age21 Maximum age 80 at the date of application Maximum number of applicants24 GuarantorsNot allowed4 First time buyersA first time buyer is any applicant that has not owned a property in the last 18 months. First time buyers accepted. For more information please see page all guarantors of a Limited Company application are first time buyers please contact us to discuss further. Allowable adverse Defaults0 in 24 in 24 loan arrears0 in 36 months (worst status).Unsecured arrears1 in 12 months, 2 in 36 months (worst status).IVA and bankruptcyMust have been discharged for 6 Management PlansAre not not criteriaNationality and residencyResidential statusIn all cases we require a 3 year UK residential address citizensEU citizens are acceptable providing they have a 3 year UK residential history and must provide valid evidence that settled or pre-settled status has been granted under the EU Settlement Scheme.

4 The evidence can be in the form of a Residence Card, or via the View & Prove Your Immigration Status Online Checking Service provided by the UK Home Office. To use the UK Home Office checking service, the applicant is required to obtain and provide a Share Code that will allow Precise Mortgages to check the applicant s settlement letter from the UK Government Home Office confirming settlement status cannot be used as citizensIrish citizens are exempt from the EU Settlement Scheme, and so instead will need to provide documentation evidencing proof of Irish Nationality such as a EEA nationalsMust have been resident in the UK for the last 3 years and have permanent rights to reside in the immunityIs not accepted if diplomatic immunity applies to immunity from UK table above shows temporary changes to our maximum allowable adverse products may have different restrictions, please see the relevant product guide for further details.

5 6 Minimum earned income No minimum income requirements on loans under 1,000,000, but applicants will need to be able to cover rental voids should they arise. For loans over 1,000,000 a minimum income of 100,000 from a sole source is required and proof of income must be A minimum employment period of 3 months in the applicant s current job is required, with 12 months continuous employment. An applicant with less than 3 months can be considered subject to the reason for the recent employment change being established and underwriter approval. Employment must be permanent and not subject to a probation period. Zero hour contracts are only permitted when the secondary applicant ( not the main income earner) is employed on this basis.

6 Payslips covering the last 6 months and the latest P60 are required. Eligible income is the lower of the average pay from the last 3 months / last 6 months. Where an applicant has a shareholding of 25% or over, or is responsible for the overall payment of their tax and national insurance, they will be classed as self-employed. Agency workers are not following are acceptable income sources: Income typeProportion allowable in calculationIncome typeProportion allowable in calculationBasic salary100%Mortgage subsidy100%Shift allowance100%Car allowance100%Large town allowance100%Overtime/bonus/commission50 %* (if regular/ guaranteed )Childcare payments100%* Full amount should be keyed into the online criteriaSelf-employedApplicants will need to have been trading for a minimum of 12 months and we will require income verification for the number of years income keyed onto our online application.

7 Acceptable income: For sole traders - net profit, private pension payments where declared on their tax calculation. For partnerships - share of the net profit. For Limited Company directors - remuneration plus dividends, director s car allowance, director s pension payment. Income verification: 2 years HMRC tax calculations and corresponding tax year overview or accounts (we only accept accounts prepared by accountants with the following qualifications: ACA/FCA, CA, ACCA/FCCA, AAPA/FAPA, CIMA, CIPFA). SA302s will be accepted as verification for previous years. In some cases 1 year s income verification can be considered subject to Criteria or occupational pension income can be considered as the sole source of income subject to a full review of the payments, bounce back loans and CBILS We will consider applications from landlords currently in receipt of furlough/SEIS income.

8 Applicants in receipt of furlough income or income from the Self Employed Income Support Scheme (SEISS) are not eligible for top slicing. Bounce back loans and Coronavirus business interruption loans aren t acceptable as a source of deposit. Please note there may be additional underwriting requirements. If you have any queries related to your application, please contact your Business Development incomePlease see the below table for further information on additional income types that are accepted, subject to underwriter eligibleCriteriaTax credits100% Latest Final Tax Credits award notification. Must have a minimum of 3 years left to run (based on ages of children).Child Maintenance50%* Must be via a Court order.

9 Must have a minimum of 3 years left to second jobMaximum 50%* Position held for more than 12 months. Should be a permanent position. Confirmation that the hours worked are income100% Confirmed personal or occupational pension can be included.*Full amount should be keyed into the online products are not termMinimum: 5 : 35 sizeMinimum: 25, : 3,000, in Scotland: 1,000, : maximum loan size 1,000, table below shows the LTVs applicable to multiple applications with Precise Mortgages:Loan amountUp to 5 applications6 to 10 applications11 to 20 applicationsUp to 500,00080%75%70%Up to 750,00075%75%70%Up to 1,000,000*70%70%70%Up to 3,000,00060%60%60%* Loans above 1,000,000 are not available on HMO limits are based on the net loan amount exclusive of any LTVI ndividual products may have further loan restrictions, please see the relevant product guide for further details.

10 Studio flats - maximum LTV 70% Multi-Units - maximum LTV 70% up to 1,000,000 or 75% up to 750,000 Let to buy - maximum LTV 80%Loan criteriaIndividual products may have further loan restrictions, please see the relevant product guide for further details. Portfolio landlordsA portfolio landlord has 4 or more mortgaged buy to let properties or 3 mortgaged buy to let properties, plus at least 1 pending application with Precise Mortgages. The following should be included in the number of properties a portfolio landlord holds: All mortgaged buy to let properties owned by the applicant whether jointly, in their sole name or by a company of which they are a director or shareholder. Any property owned on a residential basis with Consent to Let.