1. What income and related proofs are required for self-employed applicants?
Your client will need to provide their latest 3 years full accounts. These must be finalised to show the net profit (for sole traders), share of net profit (for partnerships) or salary and dividends (for directors of Limited Companies). Profit & Loss calculations alone are not acceptable.
HMRC Tax Calculations (SA302s) and Tax Year Overviews for last 3 years are accepted for cases where LTV is below 80%.
We will also require your client’s last 3 months bank statements.
2. How is income calculated for self employed applicants?
Once we’ve received the verified figures for your client’s last three years’ income, we will use either:
- the lower of the most recent year’s share of/net profit OR
- the average of the last three year’s share of/net profit figures
3. My client is self-employed and completes their self-assessment on a paper form but has lost their original paper work. What should I do?
If your client has lost/not kept the original documents sent automatically by HMRC, they’ll need to go to the HMRC website and request the following:
- the latest three years tax calculations; and
- the corresponding three years tax year overviews.
4. What income proofs are required for employed applicants?
If your client has a basic salary only we will need to see their last 3 months payslips and last 3 months bank statements.
Additionally the latest P60 may be required.
If we are using their basic salary plus bonus/overtime/commission, the proofs required will vary depending on how often they receive payment.
For applications over 90% LTV, the Society will also request an employers’ reference on receipt of application.
Further information can be found within our Lending Criteria or by contacting your local branch.
5. What is the minimum length of employment accepted?
The Society will require an applicant(s) to be in permanent employment / self employment for the following length of time:
- Employed – at least 6 months (and outside a probationary period)
- Self Employed – 3 years. If an applicant has been self employed over 2 years but not 3 the Society may accept 2 years self employment plus one year’s projected income.
A referral should be made to the Society’s local branch office where the applicant(s) are self employed for less than 3 years.
6. How does the Society treat income from a second job?
In cases where the customer has more than one job, the Society will consider amount of hours worked, length of time worked, how long the applicant(s) has been in both jobs. The Society will require payslips and bank statements to verify the income from the second job. If the applicant(s) is paid in cash the Society will only take the income into consideration if we receive income confirmation from the HMRC (Tax Summary Calculation) or SA302(s) and corresponding Tax Year Overview(s). The maximum income taken from second job is 50%.
Further information can be found within our Lending Criteria or by contacting your local branch.
7. Do you accept applicants on fixed term contract?
For cases up to and including 90% LTV the Society will consider applicant(s) who are on a fixed term contract of employment.
We will accept income if your client’s been employed on a fixed term contract for at least 12 months. Otherwise they’ll need to have at least 24 months remaining on their current contract.
Further information can be found within our Lending Criteria or by contacting your local branch.
8. What income is accepted for an applicant on parental leave?
If your client is employed and already on parental leave we’ll need to see either:
- the latest payslip which shows the client is on parental leave, e.g. Statutory Maternity Pay information and the payslip prior to going on parental leave or
- a copy of the letter received from their employer confirming the terms of their parental leave or
- a copy of their return to work letter.
The letter must be addressed to your client (not to Progressive Building Society or to whom it may concern) and should state the return to work income. Where the letter does not confirm the return to work income, the payslip issued before parental leave started will be required.
If your client is employed but their parental leave hasn’t started yet and their income won’t be changing, we just need to see their latest P60 and last 3 months payslips.
If your client’s self-employed, they’ll need to provide the proofs required for all self-employed applicants.
If your client’s on or due to go on parental leave, all existing and future childcare costs should be included as an outgoing and the future number of dependants should be declared.
9. My client receives their income in a foreign currency. Are they still able to apply for a mortgage?
The Society is not currently accepting Foreign Currency Applications. Any income used in assessing affordability for the mortgage must be denominated in sterling only.
Any assets to be used as part of a repayment strategy for the mortgage must be denominated in sterling only.
10. What benefits do we not consider?
- Child Benefit
- Working and Child Tax Credits
- Incapacity Benefit
- Employment and Support Allowance – support group only
- Disability Living Allowance (DLA) for a person aged 16 or over
- Carers/Attendance Allowance
- Personal Independence Payment (PIP)
- Industrial Injuries Disablement Benefit
- Armed Forces Compensation Scheme
- Widowed Parents Allowance (only where at least one child is aged 11 or under)
The Society will consider pension income in certain circumstances. See ‘Lending into Retirement’ and ‘Lending in Retirement’ section or refer to your local branch.
11. Is there a maximum amount of how much gifted deposit is acceptable?
We have no maximum limit for gifted deposits. However, applications including gifted deposit may be subject to additional underwriting requirements. Please refer to your local branch for more information.