Tougher lending criteria released by Barclays

September 6, 2017 by Brendan

Lenders

New lending criteria has recently been announced by Barclays bank, which will impact on loan-to-income ratios, or borrowers who need a mortgage with a higher loan-to-value.

Applicants for residential mortgages who wish to borrow five times their income, will need to have an income of £55,000, an increase from the previous income level of £45,000. All mortgage applicants who receive income of £50,000 or lower will be able to borrow up to 4.49 times their income.

Applicants of the Help to Buy scheme and those who have a LTV of 85% or higher and income above £50,000 will also face changes, as they will be offered up to 4.49 times their income. If a mortgage applicant has income below £50,000 plus a LTV of 85% or more, they will be offered an income multiple of four times.

Family Springboard mortgages will also face changes, as an income multiple of 5.5 will apply for anyone with an income over £55,000. The Family Springboard mortgage is available for borrowers who do not have a deposit, but have family members who are able to offer a 10% deposit as security.

All the changes introduced by Barclays will take affect for new customers from August 31, 2017. According to Mortgage Strategy, which had reported on the news, no further comment was available by Barclays.

Mortgage advisors invest considerable time on CeMAP courses, so that they are familiar with criteria and legislation changes, and can provide suitable advice to customers.