BASIC INCOME 100% Latest months payslip and

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1 ALLOWABLE GROSS INCOMES % ALLOWABLE ACCEPTABLE EVIDENCE BASIC INCOME 100% Latest months payslip and Latest bank statement 1 Where aggregate lending is over 500,000 latest 3 months bank statements, latest 3 months pay slips and P60s from the last 2 years or HMRC Annual Tax Summary MONTHLY BONUS- SEE NOTE 2 BELOW 50% Latest 3 months payslips and latest bank statement 1 the average value as primary income 100% Latest 3 months pay slips, last year s P60/HMRC Annual Tax Year Overview and latest bank statement the average value as primary income. MONTHLY OVERTIME OR COMMISSION 50% Latest 3 months payslips and latest bank statement 1 the average value as primary income 100% Latest 3 months pay slips, last year s P60/HMRC Annual Tax Year Overview and latest bank statement the average value as primary income. ANNUAL BONUS (BUY TO LET MORTGAGES) 100% for income multiples (50% for affordability) Past 2 years' P60/HMRC Annual Tax Year Overview and latest bank statement Additional documentation may be requested during the underwriting process Please note that the lower of the two year average or the most recent bonus must be included in the application. 100% of the bonus income will be utilised for the income multiples purposes, however only a maximum of 50% will be considered for mortgage affordability.

2 SELF EMPLOYED - INCLUDES LIMITED LIABILITY PARTNERS (ALSO SEE NOTE 4 BELOW) 100% Sole Traders Partners/Directors/Limited Companies/Limited Liability Partnerships: Applicants must provide a combination of the following documentation as a minimum requirement: Year 1 (most recent) Year 2 Tax calculation* Tax calculation* Corresponding financial accounts produced and signed by a qualified accountant OR HMRC Tax Year Overview HMRC Tax Year Overview Where retained profit or dividends are being used Year 1 (most recent) Year 2 Tax calculation* Tax calculation* Corresponding Financial Accounts produced and signed by a qualified Accountant HMRC Tax Year Overview *A tax calculation is either An online print out from the HMRC website showing the breakdown of the customer s income customers should be recommended to use this approach

3 or The calculation or computation submitted by the customer s accountant to HMRC, this should be on the accountant s headed paper or with a covering letter or SA302 provided by HMRC where an online version isn t available Tax Year Overviews should only be accepted where they demonstrate full payment of any tax liability. Where year 2 documentation doesn t demonstrate this, underwriters have the discretion to request financial accounts. However, any outstanding tax liability must be accounted for when assessing affordability. At the discretion of Mortgage Services, if the most recent (year 1) financial accounts or Tax Year Overview aren t available when verifying income for limited liability partnerships then a letter from a finance/senior partner confirming income can be accepted to support the tax calculation documentation. This can be verified by bank statements. Financial accounts for both years 1 and 2 are required where any element of retained profit and/or dividend income is being used. It s not acceptable to rely on tax calculations alone as verification of UK taxable income. All supporting documentation provided must relate to a period ending no earlier than 18 months prior to the date of mortgage

4 submission. UNEARNED INCOME FROM TRUST FUNDS ETC WHICH ARE FREE FROM ENCUMBRANCES WHICH ARE CONFIRMED BY AN ACCOUNTANT TAX ASSESSMENTS 100% Evidence showing a regular income from this source: Three months bank statements; and Evidence of the source, e.g. a portfolio of stocks and shares, letter from qualified accountant confirming income for the last 6 months in addition to advising source, that there are no encumbrances and that the income covers the term of the proposed mortgage. Care: assessment required of sustainability and continued affordability over the term. 1 MAINTENANCE PAYMENTS 100% Court Order or an established 12 month track record of payments evidenced by bank statements. Care: assessment required of sustainability and continued affordability over the term. FOSTER INCOME 100% Requests to accept foster income as allowable income can be considered where the following is obtained: Local Authority confirmation of current payment structure incorporating details of track history of previous income. A 2 year track record of fostering is required however this may vary depending on individual scenarios and the level of reliance on such income. 3 months bank statements or account history when a Barclays connection. Self Employed Accounts or SA302 if applicable. Affordability can be assessed based on actual net receipt of monthly income evidenced in the bank account matched to the Local Authority confirmation. The number of children under Foster Care

5 should be included as dependants for affordability purposes. Care: assessment required of sustainability and continued affordability over the term. PENSIONS ANNUITIES (CURRENTLY RECEIVING) 100% Pension payslip showing the applicant s address and latest bank statement OR; Three months latest bank statements together with either: a) Pension statement or b) Annuity/Pension letter c) Latest Pension P60 Pension statements and annuity letters may not be handwritten or amended and must: Show applicant s name and address, which must match that stated on the application form; Show pension/annuity company s name, address, telephone number and company s registration number (if Limited) and be on headed paper or show company stamp; Show pay dates; Cover at least one month (five consecutive weeks); Show gross income; Show net pay. Pension statements (Private/Company/State) must: Show regularity of payment; Not be older than 12 months. Annuity letters must: Show lump sum invested in fund; Show amount payable monthly; Show end date if applicable;

6 Not be older than 12 months. DISABILITY/ STATE BENEFITS as listed in the Disability Discrimination Act 2005 Disability Living Allowance being replaced by the Personal Independence Payment 100% Latest DWP Benefits Statement and 3 months bank statements clearly identifying the source of the income. Care: assess sustainability of income source during full term of the mortgage and level of reliance on state or other benefits. Attendance Allowance Income Support Council Tax Benefit Invalid Care Allowance Disability Working Allowance Incapacity Benefit Industrial Injuries Disablement Benefits Employment and Support Allowance (replaced Incapacity Benefit/Income Support in October 2008)