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Ways to apply

As a responsible lender, we’re careful when it comes to offering mortgages. Eligibility criteria are below – if you’re not sure, please give us a call.

All customers

To apply for a first direct mortgage, you and any joint applicant must:

  • be a permanent UK resident and UK tax payer
  • be able to provide evidence of your income and outgoings to show that you can afford the mortgage.
  Repayment Offset
Minimum loan £10,000 £30,000
Minimum salary - Sole applicants must have a minimum salary of £50,000, joint applicants must have a combined salary of £75,000, or one party with a minimum salary of £50,000.
Maximum term 40 years 25 years
Minimum term 2 years 2 years
Maximum loan
to value (LTV)
95% 75% up to £1 million
65% over £1 million and up to £2 million
50% over £2 million

Self-employed

How we assess the application

In order to assess self-employed applications responsibly, we need to ensure we take into consideration any future government backed loan liabilities, such as Bounce Back Loans (BBLs) or Coronavirus Business Interruption Loan Scheme (CBILS).

Our underwriters will deduct any government backed loan liabilities from the latest year’s net profit figure to give us an adjusted net profit position, as these will be ongoing costs for the business.

We will accept self-employed incomes which include government Self-Employed Income Support Scheme (SEISS) grant income.

A commercial credit search of the business may also be completed.

This is not a full credit check and will not appear on the business’s credit file.

Depending on your circumstances, we'll need to see the following documents:

 
Sole trader, General Partnerships or Limited Liability Partnership with fewer than 200 partners
  • Your last 2 years’ worth of the following documents (the most recent year must be dated within the last 18 months):
    1. Tax Year Overviews, and,
    2. Tax Calculations, evidenced by:
      • a print out from HMRC website, or,
      • an SA302, or,
      • the computation produced by your accountant that is submitted to HMRC
NOTE: Additional information (i.e. business bank statements, further HMRC documentation) may be required by the underwriter to support the application.
Limited Liability Partnership (LLPs) with 200 or more partners A letter from the company finance director or accountant detailing your earnings over the past 2 years, dated within the last 3 months
Limited company director with 25% or more shareholding
  • Your last 2 years' finalised financial accounts (the most recent year must be dated within the last 18 months)
NOTE: Additional information (i.e. business bank statements) may be required by the underwriter to support the application.

If there are multiple Directors within the business, and the financial accounts do not confirm the distribution of salary to each director, we’ll need evidence from either of the following:
  • the last 2 years’ P60s
  • the last 2 years' tax calculations and corresponding tax year overviews (a print out from HMRC website, an SA302 or the computation produced by your accountant that is submitted to HMRC)
Limited company director with less than 25% shareholding We'll consider you to be employed - please go to the 'Permanent employment' section
Self employed customers trading less than 2 years
  • We will require a minimum of 1 year's finalised financial accounts (limited companies) or 1 year's tax calculations and tax year overviews (sole trader or partnership) dated within the last 18 months.
  • Your latest 3 months business bank statements. The latest date showing on the statement must be within 35 days of the application start date.

Permanent employment

If you are in permanent employment we'll need to see evidence of your income. The table below summarises the documents we'll need, depending on how frequently you're paid:

Income Type Basic income (including any permanent allowances)1 Shift allowance1 Variable income (bonus/overtime/commission)12
Weekly Latest 4 payslips Latest 6 payslips Latest 6 payslips
Fortnightly Latest 2 payslips Latest 6 payslips Latest 6 payslips
Four Weekly Latest payslip Latest 3 payslips Latest 3 payslips
Monthly Latest payslip Latest 3 payslips Latest 3 payslips
Quarterly N/A N/A Latest 4 equivalent payslips or award letters showing payment. The payslips or award letters must include a payment that has been paid within the last 3 months.
Half Yearly N/A N/A Latest 4 equivalent payslips or award letters showing payment. The payslips or award letters must include a payment that has been paid within the last 6 months.
Annually N/A N/A Latest 2 equivalent payslips or award letters showing payment. The payslips or award letters must include a payment that has been paid within the last 12 months.

Where an award letter is being used as evidence of income, it must clearly state the exact amount that will be paid within 3 months of the date on the award letter.

What to know when you apply for a mortgage during the coronavirus outbreak

We have a temporary income policy in place at the moment. Please check if any of the following apply to you before applying.

I’m employed and my latest payslip includes Government income support
Your affordability for your application will be based on the hours you worked, as evidenced in your latest payslip. We will not include any furlough or job support income in your application.

If your working hours have recently changed, you’ll need to evidence this in your payslip for us to include any additional worked hours in our assessment.

For joint applications, we’ll assess the payslips of both applicants to work out you combined income.

If you’re applying online:
You’ll need to calculate your gross annual income based on the hours worked in your payslip. As there are 52 weeks in a year:

  • for monthly payslips, 12 times the earned amount from hours worked
  • for four weekly payslips, 13 times the earned amount from hours worked
  • for bi-weekly payslips, 26 times the earned amount from hours worked
  • for weekly payslips, 52 times the earned amount from hours worked

My income has been affected by the coronavirus outbreak
Please answer Yes to the question “Are you aware of any recent known or pending changes to your employment or income?”

We can accept variable income (e.g. bonus, overtime or commission) when paid weekly, fortnightly, four weekly or monthly.

It is also acceptable when paid quarterly, half yearly or annually where you can evidence that the latest payment has been received 1st January 2021 or more recently.

General property criteria

All properties must be in the UK and be of standard construction with a working kitchen and bathroom.

At the moment, we don’t lend on Buy to Let properties or where the property has been bought under a right to buy or shared ownership scheme. The property must be used as your main residence and not for business purposes.

For leasehold properties, we’ll only lend if there is at least 30 years left on the lease at the end of the proposed mortgage term.

New build properties

We count a property as being new build if it is less than two years old or has never been occupied in its current format. If you're borrowing against a new build property:

  • we may lend up to a maximum of 85% Loan to Value (LTV)
  • if you have an LTV greater than 75% you’ll need to have a minimum deposit of £25,000.

For remortgaging

  • your property can’t currently be up for sale.

Properties with land

If the property has more than 15 acres:

  • you’ll need to confirm there are no agricultural restrictions attached to the property and that it’s only used for personal use
  • we’ll only be able to lend you up to 75% of the purchase price or valuation, whichever is the lowest.

Flats

  • we may lend up to a maximum of 90% Loan to Value (LTV)
  • we may not offer a mortgage on a flat in the same building as a commercial property
  • if the building containing the flat has more than five floors, it must have a lift
  • if the block is ex-local authority we will require confirmation that at least 75% of the flats are now privately owned
  • we're generally unable to offer lending on freehold flats in England and Wales unless the property is of a particular type located in Tyneside or we’re also taking security against the freehold of the whole building.

Applying for your Offset Mortgage

When applying for your Offset Mortgage please enter the monthly amount you will need to pay towards your repayment strategy. For example the monthly amount you intend to save for ad hoc capital, to your Stocks and Shares ISA, investments, or the monthly payment amount to an endowment policy.

Note: Repayment strategies will not be acceptable if they are jointly held with other parties who are not also party to the mortgage application. first direct cannot recommend or provide advice in relation to the suitability or selection of any repayment strategy

Here are details of the types of repayment strategies we accept.

Repayment Strategy Evidence Required
Sale of another property - this should not be your primary residence, a commercial property or the property this mortgage is for.

Repayment Strategy based on 75% of the current property value, less any outstanding secured borrowing.
  • Mortgage statement or Offer Document dated within the last 35 days, if applicable. An internet print/statement is acceptable.
  • Solicitor's letter confirming ownership of the second property or copy of the Register of Title from the Land Registry, Registers of Scotland etc.
  • A professional valuation by an RICS Surveyor or suitable Automated Valuation dated within the last 12 months.
Endowment policy

Repayment Strategy based on the lowest projection provided in the annual endowment policy statement.
Endowment policy statement including endowment projection dated within the last 12 months.
UK sterling cash savings (Savings, Investments, Cash ISA, Premium Bonds, Sharesave).

Repayment Strategy based on 100% of existing cash savings held in a UK savings/bank account, Cash ISA or Premium Bonds.
Latest account statement dated within the last 35 days to evidence the latest value and evidence of monthly contributions. An internet print/statement is acceptable.
UK based Stocks and Shares ISA

Repayment Strategy based on 50% of the value shown on the latest account statement.
Latest Stocks and Shares ISA account statement dated within the last 35 days to evidence the latest value and evidence of regular and on going contributions. An internet print/statement is acceptable.
Other UK based investments - Unit Trust, OEIC, Investment Bonds, Shares, Gilts.

Repayment Strategy based on 50% of the value shown on the latest account statement.
Latest account statement or certificate dated within the last 35 days to evidence the latest value and evidence of regular and on going contributions. An internet print/statement is acceptable.
Ad hoc/Regular repayment of capital

The application of earnings (guaranteed or variable) to reduce the mortgage balance or to build savings over the mortgage term. We will accept 25% of the annual average of any variable income (e.g. work bonuses) and 100% of any guaranteed income.
Variable Income will only be acceptable if paid weekly, fortnightly, four weekly or monthly. Documentary evidence of the source and regularity of income will be required.

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