Virgin Money and Clydesdale Bank have recently updated their mortgage criteria requirements, now recognising non-standard income in certain situations. This alteration is expected to give more clients the mortgage loan amount they require, ultimately expanding access for those seeking a mortgage. As experienced mortgage brokers in this field, we cannot wait to showcase these new terms with potential borrowers.
What is Non-Standard Income?
Non-standard income refers to any type of additional earnings not derived from a regular salary or self-employment. This can include investments, trust funds, rental income, and other sources. Until recently, many mortgage lenders only considered traditional earned or self-employed income when assessing customers’ financial capabilities. By embracing non-standard income sources when assessing customers’ financial capabilities, these mortgage lenders are widening the door to those who otherwise may not be able to get accepted for the size of loan they require.
A Real-Life Example:
To help illustrate the impact of this change, Virgin Money Mortgages and Clydesdale Bank have shared an example of how they were able to approve a mortgage for a customer using non-standard income.
The customer applied for a £450,000 residential remortgage with a 38% loan-to-value (LTV). They had no traditional earned or self-employed income but had a £1.5 million pension pot and a UK-based sterling managed investment portfolio worth £2.7 million. As the customer was over 55 years old, they were able to access their pension funds.
Taking into account the low LTV, like-for-like remortgage, strong asset, and affordability position, Virgin Money and Clydesdale Bank agreed to use the non-standard income in their affordability assessment. As a result, the customer received an agreement in principle for the mortgage.
What Does This Mean for Potential Borrowers?
This update in mortgage criteria from Virgin Money and Clydesdale Bank is great news for potential borrowers who have non-standard income sources. By considering income from investments, trust funds, and other non-traditional sources, even when they are not currently being drawn, the banks are providing increased flexibility and opening up new possibilities for those looking to secure a mortgage.
It’s important to note that eligibility criteria will still apply, and not all non-standard income sources will be accepted by all lenders. However, these changes represent a positive shift in the mortgage industry towards recognising a broader range of financial circumstances.
My thoughts as a mortgage advisor
Our mortgage advisors are excited to share their opinion on the recent update by Virgin Money and Clydesdale Bank to include non-standard income sources in their mortgage criteria requirements. This change is an incredible opportunity for individuals with non-traditional income sources such as trusts, investments, or rental income, and it represents a positive shift in the mortgage industry towards recognising a broader range of financial circumstances.
As a mortgage advisor, I believe that this move towards inclusivity is long overdue. Many potential borrowers have been excluded from the mortgage market due to strict income criteria, despite having significant assets and financial stability. By recognising a broader range of income sources, lenders are opening up new possibilities for those who were previously locked out of the market.
The recent example of Virgin Money and Clydesdale Bank approving a mortgage for an individual with a non-standard income is a great demonstration of how this change can benefit borrowers. It shows that lenders are willing to take a more holistic view of a borrower’s financial situation and consider all available resources when assessing their ability to make mortgage payments.
As a dedicated mortgage professional working with a no-cost brokerage, I am committed to providing expert guidance and support to my clients. I am excited to inform them about these transformative income criteria adjustments and help them navigate the mortgage process with confidence.
In conclusion, the inclusion of non-standard income sources in mortgage criteria requirements by Virgin Money and Clydesdale Bank is a positive step towards greater inclusivity in the mortgage market. As a mortgage advisor, I believe that this change represents a significant opportunity for borrowers with non-traditional income sources to access mortgage products that were previously out of reach. – Grant (YesCanDo Mortgage Advisor)
What About Other Lenders?
While this article focuses on Virgin Money and Clydesdale Bank, it’s worth noting that other lenders may also be accepting non-standard income sources. As a borrower, it’s important to shop around and explore your options when it comes to getting a mortgage with non-standard income.
Our mortgage advisors are here to help you if your income sources aren’t conventional. As one of the UK’s most dependable free to use mortgage brokers, we want to make it easier for you to navigate through the loan process and find a solution that meets all your needs. We will work with you to come up with an individualised plan – contact us today!
Navigating the Mortgage Process
Getting a mortgage can seem overwhelming, but our experienced advisors are eager and available to support you every step of the way. If you have income sources that are not standard and you want to learn more about your mortgage options, our team of experienced mortgage advisors can help you. We are one of the UK’s largest fee-free mortgage brokers and are here to help you navigate the mortgage process and find the best solution for your needs. Contact us today to get started.