UTB tightens mortgage criteria and offers fee-free bridging extensions

The lender has also outlined fee-free loan extensions for bridging borrowers while adding it is still open to new business on development finance projects.

The changes have come in response to the restrictions in place around the coronavirus crisis and have forced the specialist lending industry to make significant adjustments.

On its mortgage applications, UTB has reduced its maximum loan to value to 75 per cent for employed applicants and 65 per cent for self-employed.

For employed applicants, guaranteed income, such as basic earnings and car allowances, will be accepted as normal and 50 per cent of commission will be accepted, subject to the lender’s standard 18-month history and evidence.

For key workers listed by the government, regular bonus and overtime, including shift allowances, will be considered on an individual case basis, again subject to the standard 18-month history and evidence.

However regular bonus or overtime payments will now not be accepted for most other employees.

It has committed to honouring existing pipeline applications on previous products and criteria, providing the full mortgage application was submitted on or before 1 April, and a mortgage offer is issued by 14 April.

For applications outside of this time-frame, the new criteria will need to apply.

Bridging

For borrowers with outstanding bridging loans the lender noted that borrowers do not make monthly payments and so would not be eligible for payment holidays.

However, it is willing to offer fee-free extensions for those whose plans for repayment of their bridging loan are affected by the Covid-19 outbreak.

A notice on the lender’s website said: “We can offer assistance to customers who have loans expiring in the next three months, before 1 July 2020, and whose circumstances are affected by the Covid-19 outbreak.

“We are able to extend your loan repayment date by a period of up to three months. In this situation we will not apply any fees, however interest will continue to accrue on your loan as it would with a payment holiday.

“If you have specific conditions due on your loan these can also be extended for up to three months,” it added.

Borrowers will need to apply for the extension and further extensions can be considered but may incur a fee.

Development finance

On its development finance offering, UTB said it was still lending and that it was “keen to consider” development finance proposals and future projects.

“We continue to support UK house builders and developers.

“So far, our contingency plans are working well. Proposals are being considered and processed, credit decisions are being made and we are making payments when promised,” it added.

UTB said it understood many businesses were facing financial and logistical difficulties at the moment and urged borrowers to get in contact if they were going to be affected.

“We may be able to offer solutions to help you overcome short term financial problems or challenges caused by delays to your project,” it added.

Specialist Lending Solutions has contacted UTB for comment on the moves.