From 4 March 2010 Nationwide will be making changes to how they calculate the amount that your client can borrow. They'll also be making changes to mortgages into retirement, flexible features and renaming the reservation fee to product fee.
Changes to affordability
Nationwide will be taking a more personalised approach to assessing the amount they will lend. Their focus has always been on assessing what an individual can afford to repay given their current commitments.
- The current income multiplier will be withdrawn, and replaced with a new calculation which will vary from case to case depending on your client's individual circumstances.
- The system will take the net disposable income, apply further deductions for household costs, and use a calculation that will also take account of factors such as LTV. Changes to income, outgoings or LTV could impact on the maximum affordable amount.
Click here to view a test version of the new Nationwide affordability calculator. If you have any queries please contact your BDM or the sales support team on 0845 601 0763.
Changes to mortgages into retirement
The way in which they assess affordability for mortgages into retirement will change.
For clients who are 5 years or less from their anticipated retirement date the following will apply:
- The lower of the applicants current or anticipated retirement income will be used for affordability purposes.
- Details of their current income and their income into retirement will be needed regardless of whether the mortgage term extends into retirement or not.
Changes to flexible features
Payment holiday and borrow back features will no longer be available on any new Nationwide products reserved from 4 March 2010.
Your clients will still be able to:
- Overpay and subsequently underpay.
- Extend the mortgage term to reduce payments if their repayment type is Capital and Interest.*
- Convert to interest only, with an acceptable repayment vehicle.*
*Subject to Nationwide lending criteria
Rename of reservation fee
Nationwide are renaming reservation fee to product fee, this is designed to help distinguish the fees when using product sourcing systems.
Contact details
For product and lending criteria information call:
0845 601 0763