Skipton Building Society Mortgages

A Comprehensive Guide to Skipton Lending Criteria for Contractors

Skipton Building Society is a reputable financial institution offering various mortgage products to cater to diverse needs. For contractors, understanding the lending criteria is crucial. MortgageTek provides into Skipton’s requirements, focusing on critical aspects such as age limits, income considerations, and specific criteria for contractors.

 Mortgage Age Limits

Skipton Building Society has set a standard minimum age of 18 at the beginning of the mortgage term. However, for the Track Record mortgage, the minimum age is 21 at the time of application. The maximum age at the end of the term is 75 for residential lending. Beyond age 70 or the elected retirement age, evidence of retirement income is necessary to assess affordability.

Skipton Mortgages for CIS Workers

For Construction Industry Scheme (CIS) workers, Skipton requires a minimum of 2 years in their chosen profession, a copy of the current contract, the latest month’s bank statement, and three months of invoices or payslips. Income is calculated as an average of the last three months’ payments, and there is no minimum income requirement.

Skipton Contractor Mortgages – Self-Employed

1.Earnings £50k and Above

Contractors earning £50k and above must meet specific criteria, including a minimum of 2 years in their chosen profession, six months contract history, a minimum income of £50,000 (using daily rate), and at least one month remaining on the current contract. Various documents, such as CV, current and previous contracts, and bank statements, are required for assessment.

2. Earnings Below £50k

For contractors earning less than £50k, similar criteria apply, but the minimum income is determined by the latest month’s payslips or invoices. The assessment considers up to 2 contracts running concurrently, totalling a maximum of 40 hours per week.

Mortgages for Specialized Professions

• Locum Medical ProfessionalsLocum medical professionals, supply teachers, CIS workers, and those with zero-hours contracts need a minimum of 2 years in their profession. Documentation requirements include a current contract, the latest month’s bank statement, and three months of invoices or payslips. Skipton considers up to 2 contracts concurrently, with a maximum of 40 hours per week.

• Teachers

• CIS Workers

• Zero Hours Contracts

Credit Search and History

Skipton utilizes Experian for credit searches. A full credit search is mandatory for each applicant. The Credit Performance and History policy includes various types of income in the affordability assessment, such as permanent basic income, contractual income, tax credits, pensions, and rental income.

Variable Income and Multiple Sources of Employment

Skipton accepts variable income like bonuses and overtime. If evidence shows regular income over 12 months, 100% is included; otherwise, 50% is considered. Multiple sources of employment are assessed based on sustainability, with considerations for the total number of hours worked.

Additional Income Sources

Restricted Stock Units

Restricted Stock Units are included as 50% in the affordability assessment, regardless of regularity. Documentation proving vesting within the last 12 months and the current financial year is required.

Rental Income

For residential applications, 100% of the UK Land and Property figure minus finance costs can be used as income. This requires the latest 2 years’ SA302s and evidence of the latest month’s rental income.

Benefits

Various benefits, including Universal Credits, tax credits, disability allowances, and pensions, are accepted, subject to providing relevant documentation. Child benefit has specific criteria based on total gross earned income.

Pension Considerations

SIPP Pensions

Skipton considers up to 4% of the SIPP Pension pot value as annual pension income. The applicant must be aged 55 or over at the time of application, and evidence of the SIPP Pension pot value is required.

Special Cases for Skipton Mortgages – Parental Leave, Nurses, and Pay Rises

Parental Leave

Applicants on parental leave must provide details of their income before leave and return details. Confirmation from the employer or a letter from the applicant’s employer is necessary.

Mortgages for Nurses from Skipton

For nurses, the 6 months continuous employment period starts from qualification, not from the beginning of their bursary.

Pending Pay Rises

Applicants with pending pay rises require a letter from their employer confirming details, effective within 3 months. Validity concerns may lead to case delays.

Statutory Sick Pay

Statutory sick pay can be included, provided it doesn’t exceed 25% of the overall monthly income, as evidenced by the latest payslip.

UK Nationals Working Overseas

For UK nationals working overseas, Skipton requires income evidence via UK HMRC documentation for a minimum of 1 year, a 2-year history in the same line of work, and residency maintenance in the UK.

Lending into Retirement

Retirement Criteria

For residential lending beyond age 70 or the elected retirement age, evidence of retirement income is required. The assessment considers projected retirement income and current earned income.

Special mortgages for Professional Sportspeople

Sportspeople’s Mortgages

Professional sportspeople are subject to limitations, with the mortgage term limited to their 35th birth year. Exceptions may be considered for certain funding sources, such as DLA/Universal Credit.

Understanding Skipton Building Society’s lending criteria, especially for contractor mortgages, is vital for a smooth mortgage application process. Whether you’re a CIS worker, a self-employed contractor, or fall into a special category, adhering to these guidelines ensures you meet the necessary requirements for a successful mortgage application. Always consult MortgageTek, your financial advisor, for personalized advice tailored to your situation.