The criteria tweak is among a raft of changes the lender has made to its affordability assessments, after Mortgage Solutions revealed last week that Virgin was gearing up to introduce such changes.
For customers with an income above £40,000 Virgin will take into consideration higher levels of disposable income. Virgin has also refined its approach to clients with small amounts of unsecured debt, which is said would improve the ability to support clients with credit cards or loans alongside their mortgage.
Further changes include the calculation of government fees for Help to Buy: Equity Loans in affordability assessments, which will be reduced to 3% of the borrower’s monthly financial commitments, compared to 4%.
The changes will apply to Virgin’s affordability calculator and decision in principle (DIP) with immediate effect, with any DIP approved on its existing policy honoured if converted to a full application within its 90-day validity period.
A broker statement published by Virgin read: “We have enhanced the way we calculate the loan amount we will offer your clients based on affordability. This will allow us to better meet their needs with regard to the borrowing amount they require, while continuing to lend safely, responsibly and without compromising our credit quality.”
The lender has also announced today that national head of accounts John Truswell is leaving the business after 20 years’ service. He is replaced by Sarah Green, former head of marketing at Kensington Mortgages.