Residential Mortgages

1 Criteria guideResidential Mortgages INFORMATION IS FOR THE USE OF MORTGAGE INTERMEDIARIES AND OTHER PROFESSIONALS ONLYC orrect as of: Follow us 0800 116 4385 Monday- Friday, 9am-6pmKey Updates Maximum LTV increased, now available up to 85% Re-introduction of wider acceptable adverse including active and recently satisfied DMPs Relaunch of automated cascade2 SectionPage numberApplicant criteria 4 Applicant profile (inc. minimum age, maximum age, maximum number of applicants, guarantors and marital status)4 Allowable adverse4 Nationality and residency4 Income criteria 5 Minimum earned income5 Employed5 Self-employed5 Furlough payments, bounce back loans and CBILS6 Contractors6 maternity leave6 additional income6 Unacceptable income sources 6 Loan criteria7 Maximum LTV7 Loan term7 Porting7 Remortgage applications7 Service levels7 Offer validity 7 Let to buy8 Repayment methods9 Repayment vehicles9 Deposit criteria9 Source of funds9 Builder s deposit (new build)

2 9 Family gift9 Builder s second charge9 Unacceptable sources of deposit9 ContentsNew build criteria10 Definition10 Source of deposit10 Flats10 Offer validity10 Section 106 planning obligations10 Building warranty103 ContentsProperty criteria15 General15 Tenure15 Minimum property value/purchase price15 Allowable locations15 Retentions15 Other occupants15 Inherited properties15 Flats/maisonettes/apartments15 Studio flats15 Modern Methods of Construction (MMC)16 Unacceptable property types 16 Restrictive covenants16 Structural reports17 Specialist reports17 Other17 Fees18 Validation19ID and Residency documents19 Supporting documents19 Submission requirements20 Documentation guidelines21 Help to Buy criteria11 Help to Buy England equity loan scheme 2021-2023 - purchase11 Help to Buy Wales - purchase11 Help to Buy remortgage - no capital raising12 Help to Buy remortgage - with capital raising13 Forces Help to Buy13 Help to Buy Scotland14 Help to Buy Scotland - remortgage144 Allowable adverse We allow a certain amount of adverse credit with levels being dependent on the product chosen, please see the relevant product guide for further details.

3 As a guide our maximum adverse allowed is:Defaults2 in 24 months (max 1,500 in 12 months, unlimited thereafter).CCJs1 in 24 months (max 1,000 in 12 months, or 2,500 in 24 months).Debt Management Plans (DMPs)Active DMPs and DMPs satisfied less than 36 loan arrears1 in last 12 months, 3 in 36 months (worst status).IVA and bankruptcyMust have been discharged for 6 profileMinimum age21 Maximum age 70 at the end of term, providing within stated retirement date. We may consider up to age 75 upon referral subject to underwriter review and stated retirement date. Maximum age of 85 for non-contributory number of applicants2 GuarantorsWe are unable to accept guarantors. Marital statusApplications from those who are married, in civil partnerships, co-habiting or where there is a financial dependency should be submitted in joint names.

4 Where the original mortgage is in a sole name, we may consider a remortgage in a sole name, subject to underwriter 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. 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 Income criteriaMinimum earned income 15,000 for the main applicant from primary A minimum of 3 months in current job, with 12 months continuous employment.

5 Less than 3 months in the current job will be considered subject to underwriter approval. The reason for the latest change of employment should be established and confirmation dates must be obtained from current/previous employers. Applicants must be in permanent employment that is not subject to a current probationary period. The use of income sourced from a zero hour contract is only permitted for the secondary applicant ( not the main income earner), who is employed on the basis of bank nurse hours only. No other type of zero hour contract employment is currently considered. Payslips covering the last 6 months and the latest P60 will be required to verify income. Eligible income is the lower of the average pay from the last 3 months / last 6 months. 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 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.

6 Applicants 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. Acceptable income: For sole traders - net profit, private pension payments where declared on their tax calculation (or SA302 for previous years). 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 by criteria leaveApplicants on maternity leave are acceptable providing they will return to work on the same terms of employment.

7 We will require a letter from the employer confirming the applicant s salary and working hours before commencing maternity leave , the return to work date, salary and working hours after returning to work and whether there are any changes to the applicant s contract of employment. This should be addressed to Precise incomeThe following income sources will be accepted, subject to underwriter discretion:SourceAmount eligibleCriteriaTax credits100% Current Inland Revenue documentation. Must have a minimum of 3 years left to run (based on ages of children). For joint applications , both applicants must be named on the Tax Credits award Child element maintenance50%* Must be via a court order. Must have a minimum of 3 years left to second jobMaximum 50%* Position held for more than 12 months.

8 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 income sourcesWe will not include the following sources of income: Any state benefits including Child Benefit and Housing Benefit- we are also unable to consider applicants who have been in receipt of housing benefits within the last 12 months. Any child maintenance that is not court ordered. Investment income. Income from agency will accept general contractors, CIS contractors and applicants employed on a fixed term contract. In all instances, where an applicant is responsible for paying their own tax or national insurance they will be classed as Self-employed and the relevant income verification will be required.

9 If an applicant is employed on a fixed term contract that has less than 6 months remaining, we will require written confirmation from the employer stating their intention to renew the payments, bounce back loans and CBILS Furlough income is not acceptable as an income source Self Employed Income Support Scheme (SEISS) is not acceptable as an income source 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 applicationsWe are unable to accept remortgage applications within 12 months of either the original purchase date or the last remortgage levelsResidential mortgage applications must be on an advised products are not termMinimum: 5 : 35 sizeMinimum: 25, : 1,000, LTVI ndividual products may have further loan restrictions, please see the relevant product guide for further details.

10 85% - up to 500,000. 80% - up to 750,000. 70% - up to 1,000,000. Interest Only - up to 65%. Part and Part - up to 75% (Interest Only element must not exceed 50% LTV).Let to buy applications and applications where non self-funding Mortgages exist are restricted to 80% flats - maximum LTV 70%.LTV limits are based on the net loan amount exclusive of any criteriaOffer validityOffers will be valid for 3 months from the valuation date. An offer extension may be considered (up to a maximum of 6 months from the original valuation) on request from either a broker or a build offer validityNew build offers are valid for 6 months from the date of valuation. Extensions can be considered for a further 3 months subject to Confirmation of any changes of circumstance are received in month 5 of the mortgage offer, before the expiry of the initial 6 month offer period.