Income Criteria

How much can my client borrow?

We take a range of factors into account to determine how much an applicant can borrow. Our calculation aims to ensure each customer has a sufficient proportion of their income remaining, after taking account of their mortgage repayments, to cover their additional outgoings, including, on a generic basis, household and lifestyle costs.

Affordability calculator

This will allow you to check how much we might lend your client without having to undertake a full Decision in Principle which will involve credit scoring your client.

Go to affordability calculator

Sources of Acceptable Income

Acceptable Income	Proofs Required
Annual basic pay plus bonus, overtime, and commission.	Latest P60 and payslip or current employer's reference which provides evidence of the relevantsplit of bonus, overtime and commission.
INCOME FROM SELF EMPLOYMENT
Sole trader/partnerships - Applicant's share of net profit	For loans of up to £500,000, accountant's certificate covering at least the last two years (for Sole traders confirmation of two years income from HMRC/ via SA302's is also an option - see below for more information). For loans above £500,000, accountant's certificate covering at least the last two years, two years accounts, plus three months' personal bank statements.

Director's remuneration	For loans of up to £500,000, accountant's certificate covering at least the last two years. For loans above £500,000, accountant's certificate covering at least the last two years, two years accounts, plus three months' personal bank statements.

Director's dividends	For loans of up to £500,000, accountant's certificate covering at least the last two years. For loans above £500,000, accountant's certificate covering at least the last two years, two years accounts, plus three months' personal bank statements.

Please note: Accounts must be Final Accounts (drafts and projections are not acceptable) and the end of the latest financial period must not be more than 18 months ago. If the last accounting period is greater than 12 months, the income figures will be annualised.

INCOME FROM RETIREMENT*
State retirement pension (SRP)	Annual statement of pension due on retirement.

Private pension	Annual statement of pension due on retirement. Letter from pension provider confirming pension due on retirement.

Annuity	Annual statement of annuity due on retirement . Letter from annuity provider confirming annuity due on retirement.

Company/Occupational pension	Annual statement of pension due on retirement. Letter from pension provider confirming pension due on retirement.

Investment income	Documentary evidence of value and nature of investment income i.e. Solicitor/Accountant/Trust Administrator letters.

Dividend income from a portfolio of shares	Accountant's certificate

Dividend income from an applicant that owns a share in a business	Accountant's certificate

Income from a company the applicant owns that will continue to provide an income into retirement	Accountant's certificate

State Benefits	DWP letter.

Rental income from a mortgage free property	Tenancy agreement and latest bank statement

Maintenance	A copy of the maintenance agreement, received under a Court Order, a CSA assessment or a written private agreement drawn up between the separating parties with six months bank statements as evidence of payment. Note: we will not accept payments that have not been received satisfactorily for at least six months (and at the current level for three months).

*For applicants who are within 5 years of retirement, when we assess how much we are prepared to lend we will use the lower of the anticipated retirement income figure or calculated current income figure.

INCOME FROM OTHER SOURCES
Rental Income	Refer to clients with additional properties.

Car Allowance	P60 and payslip or employers reference as appropriate.

London Weighting	P60 and payslip or employers reference as appropriate.

Maternity	Only income that the applicant expects to receive after maternity leave should be included in the Affordability Calculation and should include any additional expenses that the applicant expects to incur on her return to work, e.g. child minding. Confirmation in writing that the applicant intends to return to work must be obtained.

Carers/Attendance Allowance	Treat as disability allowance - see special circumstances below.

Fostering	Contact your service centre who will obtain advice from Senior Underwriters in each case.

Maintenance - If received under the terms of a Court Order, CSA assessment or a private agreement.	A copy of the maintenance agreement with six months bank statements as evidence of payment. Note: we will not accept payments that have not been received satisfactorily for at leastsix months (and at the current level for three months).

SPECIAL CIRCUMSTANCES
Second Jobs Income from a second job, including overtime, bonus and commission, may be accepted if it has been received for at least six months. The latest P60* and payslip must be obtained or an Accountant's Certificate if the second job is classed as self employed. Refer toself employment criteria *Where a P60 is unavailable due to short time in employment it is acceptable just to obtain a copy of the latest payslip as income proof.

Benefits - Tax credit and allowances This refers to Working tax credit, Child tax credit, Child benefit and Pension credit. These allowances may be treated in the same way as earned income, provided that the applicant can show a letter of entitlement or other suitable evidence to confirm the amount being paid. We will only exclude an allowance if the applicant has been told that its payment will cease on a stated date in the near future. We will be cautious where payment of an allowance is subject to regular review, but if we are satisfied that withdrawal of the allowance is unlikely, we will treat it the same way as earned income in the Affordability Calculation.

State Benefits Specifically for the Disabled Most commonly Incapacity Benefit and Disability Living allowance. Any benefits paid because of a disability may be treated in the same way as earned income, provided that the applicant can show a letter of entitlement or other suitable evidence to confirm the amount being paid. We will only exclude a benefit if the applicant has been told that its payment will cease on a stated date in the near future. We will be cautious where payment of a benefit is subject to regular review, but if we are satisfied that withdrawal of the benefit is unlikely, we will treat it the same way as earned income in the Affordability Calculation.

UNACCEPTABLE INCOME
Educational grants/bursaries Family credit Housing Benefit	Income from lodgers Third jobs

Proofs

Acceptable proofs of Payment history.

Please note, applicants must not have exceeded 3 months' arrears in the last 3 years.

Mortgage payment history can be evidenced using:

The last annual mortgage statement (covering 12 months' payments)
Where a statement covers less than 6 months payments and is over 6 months old. The last 3 bank statements are required
Where the above is unavailable. An existing lender's reference is required

Tenancy payment history can be evidenced using:

A reference - where the landlord is a local authority, housing association, or commercial letting company
A rent book or bank statements covering a period of 12 months - where the landlord is not one of the above

Self Employed

Sole traders and partnerships - use the lower of the applicant's last 12 months net profit figure, or the average of the last 2 years net profit figure, as confirmed by the Accountant's Certificates.
Directors of limited companies with more than 20% shareholding - use the lower of the last 12 months of the relevant director's remuneration and any share of dividends quoted, or the average of the last 2 years, as confirmed in the Accountant's Certificate. Treat remuneration and dividends as gross for tax purposes.

Alternatively, we can accept confirmation of income from HMRC, covering a 2 year period, in the form of a letter confirming the net profit, an official stamped Self Assessment (SA302) tax return, or an online SA302 (OUID) printed by the tax office and accompanied by covering letter from HMRC.

Please note: Accounts must be Final Accounts (drafts and projections are not acceptable) and the end of the latest financial period must not be more than 18 months ago. Also the minimum acceptable trading period is 2 years.

Accountant's Certificates

We will request an Accountant's Certificate for confirmation of income for self employed applicants. The certificate must be in our format and will be applied for by us, please supply the accountant's name and fax number.

From 1 December 2011, all Accountant's Certificates must be prepared and signed by a professionally qualified Associate or Fellow of one of the following bodies:

The Institute of Chartered Accountants (ACA/FCA)
The Association of Chartered Certified Accountants (ACCA/FCCA)
The Chartered Institute of Management Accountants (CIMA)
The Chartered Institute of Public Finance Accountancy (CIPFA)
The Association of Authorised Public Accountants (AAPA)
The Association of International Accountants (AIA)
The Chartered Institute of Taxation and Association of Taxation Technicians (CIOT/ATT)
The Institute of Chartered Accountants of Scotland (ICAS)
Chartered Accountants Ireland (CAI)

If the accountant does not have one of the above qualifications then the Accountant's Certificate cannot be accepted and the corresponding years SA302 tax assessments issued by HMRC must be used instead.

Clients with Additional Properties

Where your client will own more than one mortgaged property on completion of their new loan with Nationwide the maximum LTV is 85%

For information about products please see our products, loan size and maximum LTV criteria.If your client owns more than one property, we require all addresses and mortgage details.

Let properties are treated as self-financing where the rent received is at least 125% of the current mortgage payments.
Where let properties are mortgage free a percentage of the total monthly rent received will be treated as income.
Rent must have been received for a minimum of one month at the point the application was submitted and we will require up to date bank statements to confirm this.
A copy of the signed tenancy agreement is required.

If the property is covered by an accountant's certificate/2 years accounts, no tenancy agreement/bank statements are required and rental income, mortgage payments and mortgage debt for the let properties can be ignored. The net profit/director's remuneration or dividends figure should be used as income.

For properties let abroad do not use or key any rental income derived from them onto our systems. Key the mortgage details onto our systems only where the mortgage is continuing (if the mortgage debt is in a foreign currency it should be converted to sterling). There is no requirement to obtain past payment history proof for foreign currency mortgages but normal requirements apply to mortgages in sterling secured on properties abroad.

Nationwide for Intermediaries