Vernon BS removes affordability restriction on family-supported mortgages - Mortgage Soup
By Google News Personal Finance ·
The changes mean that the borrower who owns the property will no longer need to demonstrate an ability to meet at least 50% of the monthly mortgage repayments. Instead, affordability will be assessed using the combined circumstances of all applicants.
The society has also removed the maximum age restriction for capital-and-repayment mortgages, allowing mortgage terms to extend beyond the supporting borrower’s intended retirement age.
Interest-only borrowing can be considered up to age 85 in certain circumstances.
The revised criteria are intended to give intermediaries more options when arranging mortgages involving financial support from family members, including reverse JBSP arrangements in which adult children help their parents meet affordability requirements.
Under a JBSP mortgage, family members can contribute their income towards the mortgage application without becoming legal owners of the property.
Vernon’s proposition allows up to four applicants and their incomes to be considered, enabling more than one family member to support the borrowing.
The society also offers split repayment terms, allowing different portions of a mortgage to be repaid over different periods. This could enable the element supported by a family member’s income to be repaid sooner, while the remaining borrowing continues over a longer term.
There is no fixed minimum income requirement, with affordability assessed according to the applicants’ combined financial circumstances.
The lender considers 100% of regular bonuses, overtime and allowances, alongside income from zero-hours contracts and limited-company directors.
The JBSP proposition is available for both purchases and remortgages, with applications individually assessed through manual underwriting rather than automated…
Originally published by Google News Personal Finance
