Bank of Ireland has tightened its mortgage lending criteria around affordability assessments, capital raising remortgages, self-employed and furloughed borrowers.
The changes also apply to Post Office for Intermediaries business which is operated by Bank of Ireland.
The bank is now temporarily limiting the maximum loan to value (LTV) of remortgages which involve releasing capital to 75 per cent.
It has also curtailed the bonus income it will consider – annual and semi-annual bonuses will not be accepted for loan to income (LTI) and affordability assessments.
However, it is still accepting high frequency bonuses along with regular commission and overtime on current payslips, although additional documentation maybe required, or the amount used may be limited.
Self-employed and furloughed borrowers
Self-employed borrowers will need to confirm they have resumed trading and evidence will be required through bank statements, with other documentation also potentially being requested, including cases where applicants have not restarted trading yet.
Bank of Ireland is accepting applications from customers who are on furlough provided they have a confirmed a return to work date and evidence will be required.
Affordability will be based on 100 per cent of the return to work salary but historic variable income such as bonus, overtime or commission will not be considered.
For joint applications where one applicant is furloughed, the case may still proceed if the application passes the affordability assessment based on the other, non-furloughed applicant’s income alone.
Owain Thomas is features and contributing editor of Mortgage Solutions and editor of Specialist Lending Solutions.
He also has experience in the protection, pensions, workplace benefits and HR areas.
Owain has won two Headline Money Awards and the Protection Review’s Journalist of the Year award.