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Lending criteria

All the facts and figures on one handy page


Acceptable tenancy types

Area  Acceptable tenancy types
England & Wales  -Assured shorthold tenancies for a term not in excess of 12 months. 
-A corporate let for a term not in excess of 12 months. Longer term corporate lets up to 3 years may be considered on a case by case basis. 
Scotland - Short assured tenancies with a validly served AT5 Notice for a term not in excess of 12 months.
- A corporate let for a term not in excess of 12 months.  Longer term corporate lets up to 3 years may be considered on a case by case basis.
Northern Ireland 

- A tenancy which is not regulated, restricted or protected and one that is granted for a term not in excess of 12 month.

- A corporate let for a term not in excess of 12 months. Longer term corporate lets up to 3 years may be considered on a case by case basis.

Tenants who have the benefit of diplomatic immunity, are claiming housing benefit, rent rebate or rent allowance, are DSS supported, in student lets or are asylum seekers are not currently acceptable.

It is the landlord's responsibility to ensure that they comply with all applicable tenancy legislation.

Additional borrowing / capital raising (BTL / CBTL)

We’re happy for customers to remortgage with additional borrowing to fund BTL and CBTL properties. 

Additional borrowing / capital raising isn’t allowed for the following (non-exhaustive list of) purposes:

  • Purchase of a timeshare property
  • Payment of a tax bill 
  • To cover business costs
  • The purchase of stocks and shares
  • Currency speculation
  • Debt consolidation
If the borrowing is to support home improvements and is more than 10% of the property value, we may require cost estimates prior to approval.
 
Examples of acceptable loan purposes include (but are not limited to):-
  • Structural/non-structural home improvements;
  • Buying the freehold or new extended lease;
  • Buying land to extend security of the current property;
  • Purchasing another property;
  • Buying a car, caravan or boat;
  • Buying furniture, electrical or white goods;
  • Buying out partner's interest (non-borrower);
  • Buying out joint borrower (transfer of equity);
  • Paying for school fees or childcare;
  • Paying for holidays.
Where the property is currently free of debt or any other financial liability, the application will need to be submitted and transacted as a remortgage. Such transactions may incur higher conveyancing fees than a standard remortgage. 


Additional borrowing / capital raising (residential)

Where a customer is remortgaging to Atom and wants to borrow extra funds it’ll usually be allowed, up to standard LTV limits, providing we’re happy with the purpose of the loan.

Examples of acceptable loan purposes include (but are not limited to):-
  • Structural/non-structural home improvements;
  • Buying additional/final share in shared ownership;
  • Buying the freehold or a new extended lease; or
  • Buying land to extend the current property.
  • Purchasing another property;
  • Buying a car, caravan or boat;
  • Buying furniture, electrical or white goods;
  • Paying off a second charge;
  • Debt consolidation (except for Right to Buy or Shared Ownership);
  • Buying out joint borrower (transfer of equity);
  • Paying for school fees or childcare;
  • Paying for holidays;
We’ll complete a reasonability assessment based on the amount and purpose of the additional borrowing and may seek additional evidence for the borrowing or, in some circumstances, we might not be able to lend.We won’t allow additional borrowing or the option to raise capital for the following (non-exhaustive list of) reasons:
  • Purchase of a timeshare property
  • Payment of a tax bill 
  • Business purposes
  • The purchase of stocks and shares
  • Currency speculation 
If you are unsure whether we’ll accept the purpose of borrowing, get in touch.

In some circumstances we may need to appoint a conveyancer to act for the customer and for us, for example if a party is being added or removed from the current mortgage (transfer of equity), or where a second or subsequent charge is registered against the property. The customer will have to pay the cost of this.

Where the property is currently free of debt or any other financial liability, the transaction will usually attract higher conveyancing fees than a standard remortgage, which the customer will need to pay. The application will need to be submitted as a remortgage.

If your client is capital raising to staircase on a shared ownership property or to fully repay a help to buy equity loan, be aware that they’ll incur extra costs in this process, for example - valuations for the agent's purposes and legal costs.

Address history

We ask all applicants to supply their address history for a minimum period of 3 years. 

All applicants must have been resident in the UK for at least the last 12 months for us to consider lending. 


The only exception to this is where the applicant is in the British Armed Forces and has a current BFPO address, along with a 3 year BFPO or UK address history. See BFPO section for more information.

If we can’t find the applicant on the electoral/voters’ roll at their current address, they’ll also need to provide proof of current residence from the list of accepted identification.

Adverse credit history

All applicants will go through credit reference checks, so we’d recommend that your client reviews their credit file in advance of completing their application to make sure all of the information is correct.

Applications with more than one instance of adverse credit history will be declined. 

Atom may be prepared to consider applicants with single, isolated and minor instances of adverse credit history and where likelihood of reoccurrence is assessed as low, in line with the table below:- 


Adverse credit found Minimum Requirements
Bankruptcy/Sequestration Must have been discharged more than 6 years ago.
County Court Judgements (CCJs) No CCJs allowed within last 6 months. 
Where there is 1 satisfied CCJ for up to £500, the application may be considered subject to satisfactory credit score. 
Where there has been more than 1 CCJ, the application will be declined subject to satisfactory credit score.
Where there is 1 unsatisfied CCJ for up to £250, the application may be considered.
Defaults No defaults allowed within last 6 months.
Where there is 1 satisfied default for up to £500, the application may be considered where this is an isolated incident and subject to satisfactory credit score.
Where there is 1 unsatisfied default for up to £250, the application may be considered where this is an isolated incident and subject to satisfactory credit score.
Where there has been more than 1 default, the application will be declined. 
Individual Voluntary Arrangement (IVA) Must have been completed more than 6 years ago. 
Mortgage / secured loan arrears
Any instance where agreed repayments to the account are made later than their due date. 
Account must currently be up to date.
Account must not have been in arrears within the last 12 months.
Where account has been a maximum of 1 month in arrears between 12 and 36 months ago, the application may be considered where this is an isolated incident and subject to satisfactory credit score.
Where account has been in arrears more than 36 months ago, the application may be considered where this is an isolated incident, which is fully resolved, and subject to satisfactory credit score. 
Arrears on an unsecured loan or hire purchase

Any instance where agreed repayments to the account are made later than their due date. 
Account must currently be up to date. 
Account must not have been in arrears within the last 12 months. 
Where account has been a maximum of 1 month in arrears between 12 and 36 months ago, the application may be considered where this is an isolated incident and subject to satisfactory credit score.
Where account has been in arrears more than 36 months ago, the application may be considered where this is an isolated incident, which is fully resolved, and subject to satisfactory credit score. 
Arrears on a credit card, store card, mail order, communications accounts, or exceeding an authorised overdraft limit. 

Any instance where agreed repayments to the account are made later than their due date, where an overdraft balance has been greater than the overdraft limit where cheques, direct debits and standing orders have been bounced to keep an account in order. 
Account must currently be up to date.
Where account has been a maximum of 2 month in arrears, the application may be considered where this is an isolated incident and subject to satisfactory credit score. 
Repossession Where this has occurred more than 6 years ago the application may be considered where this is an isolated incident and subject to satisfactory credit score. 
Debt Management Plan Must have been completed more than 6 years ago.

Affordability

It’s really important that applicants demonstrate they can afford to repay their mortgage before we offer one to them. To ensure that’s the case, we take a range of factors into account to determine how much they can borrow, including their income and expenditure.

Before you submit any application we recommend using our affordability calculator. This will provide you with an accurate borrowing figure for your clients, based on their personal circumstances.

If there are two applicants, both incomes can be used in the affordability assessment.

The applicants will need to provide accurate expenditure information including:
  • any credit commitments;
  • basic essential expenditure (childcare, food, laundry, utilities, telephone, council tax, buildings insurance, ground rent/service charges, essential travel); 
  • average quality of living costs (clothing, household goods, personal goods, basic recreation).
Where an existing fixed term credit facility has less than 6 months to run then we’ll normally ignore that, however this still needs to be keyed onto the application.

All information supplied will be cross-referenced against the applicant’s credit bureau record, bank statements and proof of income to verify that everything’s been declared and that the figures are accurate.

Age

For a residential mortgage, applicants need to be:
  • at least 18 years old when applying;
  • no more than 80 years old when the mortgage ends. 
For a BTL mortgage, applicants need to be:
  • at least 25 years old when applying;
  • no more than 80 years old when the mortgage ends.

Applicants living outside the UK

The only applications we’ll consider from those living outside the UK are from British Armed Forces personnel that are currently stationed abroad with a BFPO address.

Assignable contracts

We don’t currently accept applications for properties with assignable contracts.

Back to back transactions

We don’t currently accept applications for back to back property transactions.


Bridging loans

We don’t currently offer bridging loans.

Buy To Let (BTL) - not currently available

We’re happy to accept BTL applications as long as:
  • The applicant(s) aren’t first time buyers;
  • All applicant(s) are at least 25 years of age;
  • The main applicant has a personal income (calculated using Atom’s acceptable income types) of at least £25,000; 
  • The applicant(s) won’t have more than four mortgaged BTL properties in total on completion of the mortgage; and
  • The applicant(s) won’t have BTL loans totalling more than £1.5m on completion of the mortgage.
Applicants also need to ensure the rental income (determined by our valuer) for the property to be mortgaged is at least 145% of the contractual mortgage payment on an interest-only basis. This is calculated at the maximum of the product pay rate or reversion rate (Atom’s BTL SVR) (whichever is the greater), to allow for payment shock, voids or any unplanned expenditure.

The maximum LTV that we’ll allow depends on the loan amount required. The following LTV limits will apply to all BTL applications:
 Loan (£)  Max LTV
 Up to £500,000   75%
 Over £500,000  70%


Loan type / Property type  Max LTV Comments
 Purchase / Remortgage  75%  Permitted for various non-home improvement purposes, however a customer can’t remortgage for business purposes
 New Build  70%  N/A
 Ex local authority  60%  Subject to minimum valuation of £100,000


  Minimum loan  Maximum loan (subject to LTV maximum)
Single Property   £50,000  £750,000
Total Atom BTL balances   £50,000  £1,500,000
If an applicant has existing BTL mortgages we’ll utilise the information supplied by them (addresses, outstanding balance/term, and monthly mortgage repayment/rent received), as well as the information we obtain from the credit bureau in order to establish an overall BTL portfolio rental cover. 

It’s essential that the applicant:
  • Fully declares all of their BTL mortgages; 
  • Provides us with rental evidence for each of their properties (via ASTs and/or bank statements); 
  • Has no significant adverse credit information recorded; and
  • Has BTL portfolio rental cover of at least 145% of monthly payment on non Digital Mortgages by Atom bank mortgages or 145% of Atom’s SVR for Digital Mortgages by Atom bank BTL mortgages.
 
If the applicant fails to declare any of their BTL portfolio, or has an adverse credit record, it’s likely their application will be declined.

Should the applicant have a large BTL portfolio, which we define as more than 4 BTL properties or BTL loans totalling over £1.5m, the case will be treated as a commercial investment. These cases can be assessed by our Business Banking team.

We’re currently unable to accept BTL applications where the property will be a House in Multiple Occupation (HMO), or is in shared ownership. The maximum number of tenants we will accept is 5 and all must be party to the same tenancy agreement.

Contractors / Non-permanent employments

We’re prepared to consider applications from applicants in forms of non-permanent employment or on temporary contracts, subject to the provision of the following information:-
  • Previous contract history;
  • Length of time with current employer;
  • If the contract has been renewed before;
  • Remaining term of the current contract;
  • The prospects of renewal/obtaining alternative employment in the same type of work at a similar salary;
  • Whether the contract is connected to a specific project.
Where the information supplied satisfies the following criteria then the applicant's contract income can be included within the affordability assessment:-
  • For a contractor in a professional field and where their day rate is £250 or more (per day) and annual income is £50,000 or more;
  • Evidence can be shown that such temporary contracts have produced a regular income flow over at least 1 year, either through a single contract or a combination of contracts (with less than 2 months ‘downtime’ between each);
  • Must have a minimum of 1 years previous employment in same field (which they could evidence by way of previous p60);
  • Must satisfy all other criteria;
  • Some form of written communication can be received from the current employer that the present contract is reasonably long term (a minimum of 6 months and ideally longer) and is likely to be renewed.
If the above criteria cannot be satisfied then contract workers will be treated as self-employed therefore two years’ accounts or two years’ HMRC self-assessments (SA302s or Online Tax Calculations) will have to be provided to evidence income.

Each case will be considered by an underwriter on an individual basis. We may request additional information where considered appropriate and relevant to the lending decision.

Conveyancing

We operate a panel of conveyancers and will instruct our conveyancers as part of the application. Any fees will be paid by the customer on completion.

Credit scoring

All mortgage applications are credit scored. To determine the score, we use a combination of the customer’s application data and credit bureau data to help us to build a clearer picture of the applicant’s finances.

We use CallCredit to inform our credit searches. 

If the applicant can’t satisfy our minimum mortgage score, then the application will be declined.

Decision in Principle

Our DIP facility is available on our intermediary portal.

This DIP provides a preliminary agreement that the applicant meets our main lending and affordability criteria. It’ll detail how much we may lend, is valid for 90 calendar days* and is subject to:
  • A full check against our lending and affordability criteria,
  • The receipt of a full and satisfactory property valuation, and
  • The supplemental information being approved in order to progress to a mortgage offer.
Just so you know, completing a DIP will place an enquiry footprint (soft footprint) on the applicant’s credit file.

A DIP is not a guarantee of the overall acceptability of the mortgage application. Each application is subject to final approval by our underwriting or mortgage processing team, who will carefully assess all applicant information together with supporting documentation and evidence concerning both the applicants and the property.

Following submission of the Full Mortgage Application, an updated credit bureau report will be requested and any significant increase in credit commitments may impact overall affordability.

*For the avoidance of doubt, the 90 day DIP validity period runs from the date the DIP is completed for 90 calendar days. For example:
DIP Decision Date DIP Expires at 23:59 hrs on 
 23rd June 2016  21st September 2016
 23rd October 2015  21st January 2016
 12th March 2017  10th June 2017

Dependents

A dependent is anyone who isn’t named on the mortgage, but is supported financially by those who are. 

If they’re aged 17 or over and are financially dependent on the applicant(s), they must be declared on the mortgage application as a dependent adult. For example, this could be a child over the age of 17 who’s being supported financially by their parents through further education, or an elderly relative that’s living with the applicant.

Any child (aged under 17) who is dependent on the applicant(s) should be declared on the application as a dependent child.

Deposit

The deposit for any purchase should typically come from the applicant(s) own resources. We don’t accept monies from secured/unsecured loans as deposits with the exception of equity released from an existing property, eg in a let to buy application.
 
Unacceptable deposit sources include
  • Money raised via a secured loan;
  • Money raised by an unsecured loan;
  • Vendor cash deposits.
We’ll accept a gifted deposit, as long as no interest in the property is registered to a third party. To satisfy our policy requirements you’ll need to submit a declaration from the gift donor(s) at application to confirm:
  • Their name;
  • Relationship to applicant;
  • Amount of gift, plus a line stating that it’s a ‘non-returnable gift’; and
  • The gift donor(s) will also be required to complete our standard Gifted Deposit form as part of the conveyancing process, which will include an enquiry as to the source of the funds.
For residential applications, we might ask for proof of deposit, for example if a first time buyer is looking to put down an unusually large deposit. Please note that proof of deposit will always be required for BTL applications.

EEA nationals

British and EEA (European Economic Area) nationals must have had a UK address for a minimum of 3 years to apply for a mortgage with us.

Due to EEA and or EU agreements, those from the following countries will be treated as EEA nationals for mortgage purposes:
  • Iceland
  • Liechtenstein
  • Norway
  • Switzerland

Employment

We’re open to lending to customers whatever type of employment they’re in, however applicants must outline a three year employment history and will be expected to have:
  • Been employed for a minimum of three months in their current role;
  • Had a minimum of 12 months’ continuous employment; and
  • Be classed as a permanent employee (probationary period accepted at underwriter’s discretion).
There’s a chance that we may request employment references, and all income must be evidenced as laid out in our requirements.

Energy Performance Certificate (EPC) rating

When it comes to BTL, properties must hold a minimum energy efficiency rating of ‘E’ in order to be considered for mortgage lending. 

We don’t currently apply any restriction on the minimum EPC rating of a property that’s subject to a residential mortgage.

Expatriates

We don’t currently lend to British expats as applicants must have been resident in the UK for at least the last 36 months in order for us to consider lending. 

The only exception to this is where the applicant is currently in the British Armed Forces with a BFPO address, and where the last 3 years’ addresses are either UK addresses or BFPO addresses.

Finders fees

We’re happy to lend against residential properties that involve the payment of finder’s fees (fee or commission based). Please note, finder’s fees need to be paid by the applicant and can’t be added to the mortgage advance.

We won’t lend against BTL properties involving finder’s fees. 

This restriction excludes any normal, market standard fees or commission payable to an estate agent for handling the sale.

First time buyers (FTB)

For residential applications:
  • We classify an applicant who hasn’t previously held a residential mortgage in the UK as a first time buyer; and
  • The maximum loan available to first time buyers is £300,000.
For Buy to Let (BTL) applications:
  • We classify an applicant who has not held either a residential or BTL mortgage in the UK as a first time buyer.

Fixed term leave from work (e.g. maternity and paternity)

For applicants currently on fixed term leave from work (e.g. maternity or paternity), we’ll use their salary in the income calculation, providing the applicant is returning to work within 3 months. 

In all cases we’ll require: 
  • A letter from the applicant confirming their intended return to work date; and
  • A copy of their last payslip prior to going on fixed term  leave; and
  • A copy of their latest payslip during the fixed leave period.
If the applicant is returning to work on a lower salary, this needs to be noted on their application and they’ll also need to provide a supporting declaration with the payslip. In some circumstances we may also seek an employment reference.

Further advance

An existing customer may want to seek a further advance from us. 

Any request for further borrowing will be subject to our lending criteria at the time of application. 

Further advances won’t be permitted within 6 months of completion of the original mortgage, and will be subject to our standard maximum LTV levels. The minimum additional loan we currently offer is £5,000.

Please see the additional borrowing section for further details on acceptable purpose.

In some circumstances there may be additional legal costs to be paid e.g. Transfer of Equity.

Home improvements

If a customer wants to carry out home improvements or remedial work on a property, and requires a further advance of more than 10% of the property value, we’ll need written estimates, along with sight of any necessary planning permissions or building consents.

We’re unable to lend on the future value of a property, so all lending will be based on the current value of the property.

House purchase

For all residential mortgage applications, the customer(s) must intend to occupy the property within the next 6 months.

Houses in Multiple Occupation (HMO)

We don’t currently accept applications for Houses in Multiple Occupation (HMOs) on a residential BTL lending basis.

Applications for HMOs should be forwarded to our Business Banking Secured Lending team.

Identification



As we’re a digital bank, we’ll always attempt to electronically identify and verify customers (ID&V) using the information provided by Credit Reference Agencies.

Where we’re unable to do this, we’ll need to see the following documents - exactly what we need will be advised as part of our automated Decision in Principle:
Personal ID (government issued document with a photograph) Address ID 
Current Passport Current UK (photo card/old paper style) driving licence
Current UK or EEA photo card driving licence Statement dated within last 3 months from a UK authorised financial services firm. We will accept full statements printed from the internet but not screen prints
Firearms certificate or shotgun licence Building Society passbook
Identity card issued by the Electoral Office for Northern Ireland Utility bill (not mobile phone) dated within last 3 months. We will accept full statements printed from the internet but not screen prints

Recent evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax  benefit), tax credit, pension, educational or other grant
  Local authority council tax statement or demand for payment
  Recent correspondence (dated within last 3 months) from HMRC
  Residence permit issued by Home Office

Income multiples

4.5 x single
4.5 x joint

Income types (acceptable)

In this table you’ll find the types of income we accept and the percentage used to assess affordability:


Income type  Percentage allowed
 Basic salary (or proven drawings)  100
 Area allowance  100
 Car allowance
 100
 Shift allowance
 100 
 Mortgage subsidy/housing allowance  100 
 Guaranteed* overtime  100 (last year average) 
 Guaranteed* bonus/commission  100 (last year average)
 Pension/annuities  100
 Disability allowance  100
 2nd job salary  50 (only where a minimum 12m track record can be evidenced)
 Regular** overtime  50 (last year average)
 Regular** bonus/commission  50 (last year average)
 Investment income  50
 Rental income  50 (mortgage free properties)
 Maintenance  50
 Working family tax credits  0
 Child benefit and child tax credits  0
 Other DWP benefits  0
 Rent a room
 0

* We define guaranteed overtime / bonus / commission as either a contractual payment, or where the applicant can show an ongoing and regular payment track record through their payslips or P60 - this will be quite common for people working in the Emergency Services and Nursing.  

** Regular overtime / bonus / commission is defined as a payment received on a regular, but not necessarily continual basis, e.g. 6 months out of 12, or seasonal overtime.

Income verification

All applications will be subject to verification of income.

As a digital bank, Atom may, in certain cases, use information held at the credit bureau to verify income. If we are able to do this, we’ll not ask for any income verification on the DIP.

In most other cases, we’ll usually need the following supporting documents:

 Applicant status   Minimum evidence requirement 
 Employed  The latest monthly payslip
 Last month's personal bank statement
 The latest P60 or payslips for the last 3 months

(if overtime, commission or bonuses applicable)
 Self Employed  An accountant's certificate covering last 2 years of trading, OR

HMRC self-assessment returns (SA302s or Online Tax Calculations) for the last 2 years
 The last 2 years of accounts 

(If mortgage loan is £500,000 or over, and/or LTV is 90% or more)
 Last month's business bank statement
 Last month's personal bank statement
 Contractor  A copy of any contract(s) covering the last year
 Last month’s personal bank statement
 Last month's business bank statement (if applicable)

We’ll also require additional proof of income for any of the following:


Income type  Proof required 
 Work allowances (area, car, shift, housing)  The latest payslip/P60 or current employer's reference (by exception)
 Overtime, bonus and commission  The last 3 payslips/P60 showing evidence of relevant split between salary, overtime, bonus and commission
 2nd job income  Employed (only accepted if role the is permanent and an income has been received for at least 6 months): The latest payslip/P60 or current employer's reference (by exception)

Self-employed: An accountant's certificate or HMRC self-assessment covering the last 2 years of trading. For loans of £500,000 or more we’ll also need the financial accounts for the last 2 years 
 Pension/annuity  An annual statement of pension/annuity on retirement or latest pension payslip
 Personal independence payment (formally disability living allowance)  A letter from the DWP to confirm current entitlement
 Directors income  Self-employed: An accountant's certificate or HMRC self-assessment covering the last 2 years of trading. For loans of £500,000 or more we’ll also need the financial accounts for the last 2 years 
 Investment income  A savings/investment account statement
 Rental Income  A tenancy agreement and latest bank statement
 Maintenance  A copy of a maintenance agreement, CSA assessment or written private agreement with recent proof of payment

Interest only repayment strategies (residential)

Interest-only
We don’t currently offer full interest-only lending.

Capital and Interest
Acceptable for all mortgages

Part and Part (capital and interest / interest-only) - This option is subject to availability and is not currently available
For the mortgage to proceed on a part and part repayment basis, the following requirements need to be met:
  • Less than 85% LTV;
  • At least 50% of the loan amount must be on a C&I repayment basis;
  • Combined useable application income of £100,000;
  • Minimum property value of £500,000;
  • The applicant must meet our affordability requirements for the total mortgage on a full C&I repayment basis;
  • The applicant also needs to be able to prove that a repayment strategy in line with our policy requirements is in place.


Repayment vehicle (residential)   Lending criteria & value assessment Evidence required Max amount of interest-only element covered Logic 
Existing endowment policy (both with profits and unit trusts)

Allow up to 100% of projected amount using the middle % figure currently 6%.

Maturity date of policy must be in line with mortgage term.

A copy of latest projection statement dated within last 12 months, and showing the maturity value and evidence of regular contributions. 

 The following policy details: 
  • Name of provider
  • Policy number
  • Names of the policy holders
  • Maturity date
  • Forecasted maturity value and monthly cost
100%

Endowment is expected to have been taken with the sole reason of clearing the mortgage debt
Existing personal pension plan (company or individual) A maximum interest only loan of 25% of the “Retirement Fund Value” at the planned retirement age taken from the medium projection figure.

Mortgage term must be aligned to the expected retirement age.
A copy of latest statement dated within the last 12 months. 

We’ll use 100% of the tax free lump sum (which is 25% of the projected value at retirement age).
100% Pension tax free lump sum typically shown as 25% of fund value.

Allows some retirement income for customers in the long term
Sale of another UK property Current equity must cover 100% of the interest only element. A copy of the latest mortgage statement dated within last 12 months is required. Atom will check property ownership and determine value.

Evidence of the address, mortgage amount and estimated value of the property must be provided.

We may ask the customer or intermediary at their own expense to provide an independent valuation of the property, which must be carried out by an FRICS/MRICS registered valuer.
100% Sale of another property is reasonable given the customer will not be reliant on this as their sole residence
Managed share portfolio Only UK FTSE listed securities are acceptable. The Interest Only loan element will be considered at 70% of the current valuation. A copy of share certificates, a nominee account statement or confirmation from an authorised stockbroker containing evidence of shareholdings, together with their valuation (must be dated within the last 12 months).
100% Potentially a share portfolio could be used to cover some, or all, of the mortgage debt
 
Managed investment plan (these include: unit trusts/open ended UK investment companies, investment bonds (UK), stocks and shares ISA)
Only UK listed trusts/investment are acceptable. The interest only loan element will be considered at 70% of the current valuation. A copy of latest projection statement dated within the last 12 months. Allow up to 70% of projected amount using the middle % figure currently 6%. 100%  
 
Sale of mortgaged property/downsize
We don’t consider this to be a reasonable repayment strategy.
N/A
0% Difficult to accurately assess the likelihood of downsize
Savings/ISA We don’t consider this to be a reasonable repayment strategy. N/A 0% Unlikely that customers will have savings equal to mortgage-if they did they'd typically select an offset mortgage
Regular overpayment Not considered to be a reasonable repayment strategy  N/A 0%  Difficult to provide satisfactory evidence of future overpayments
Inheritance We don’t consider this to be a reasonable repayment strategy. N/A
0%
 
Sale of another property (non UK) We don’t consider this to be a reasonable repayment strategy. N/A
0%
Difficulty in establishing value and equity position of foreign property

Joint mortgages

We’re happy to accept joint mortgage applications with a maximum of:
  • 2 applicants for residential mortgages
  • 2 applicants for Buy to Let mortgages.



Lending decision appeals

When we make underwriting decisions, our process is fair, impartial and responsible, but we also understand that in some cases, new information can become available that might change our decision. 

If you want to query a declined lending decision, please contact your Atom BDM/TBDM [link to contact page] to discuss the case. They’ll give you a better understanding of why the application was declined. 

We’re more than happy to review our lending decisions where new, supporting information (that wasn’t available at the time of decision) is provided. If this is the case and you’d like to challenge or appeal a lending decision, please contact your Atom BDM/TBDM to discuss.

 
If you wish to register a complaint, this’ll be handled in accordance with Atom’s Complaint Handling Policy.

Lending into retirement

Atom define retirement age as the lower of the applicant's stated retirement age or age 70 years. 

Where the application term extends beyond an applicant's retirement age, and where retirement is within 10 years of the application date then we'll assess mortgage affordability based on the post retirement income. 

Where retirement is more than 10 years from the application date, we will confirm that there is a source of post retirement income, in order to confirm the applicant's ability to maintain mortgage payments into retirement.

Lifetime mortgages

We’re not currently accepting applications for lifetime mortgages.

Loan To Value limits (BTL)

The maximum LTV percentage for BTL applicants depends on the value of the property, the loan amount requested and the borrower type. In all cases, the lowest limit will apply.

 Loan type / Property type 
Max. LTV   Additional info 
 Purchase / remortgage   75% Permitted for various purposes as detailed under "Remortgages".

BTL Remortgages will not be permitted for debt consolidation or for business purposes.
 New build   70% Subject to new build criteria
 Ex local authority   60% Subject to minimum valuation of £100,000

Loan limits

   Minimum loan   Maximum loan (subject to max. LTV) 
BTL (single property)   £50,000  £750,000
Total BTL exposure (for any individual, otherwise see Business Banking).  £50,000  £1,500,000

Loan To Value limits (residential)

The maximum residential LTV percentage depends on the loan amount and type of borrowing.

Loan (£)   Max. lending limit
 Up to £300,000  95%
 £300,001 - £450,000  90%
 £450,001 - £600,000  85%
 £600,001 - £750,000  75%
 £750,001 - £2,000,000  60%


Loan type / Property type  Max LTV 
 House purchase / Remortgage  95%
 Flats and apartments  95%
 New build houses  85%
 New build flats  80%
 Right to buy  95%
 Shared ownership (proportion of share)  95%
 Applicants resident in the UK for less than 3 years  75%
 Second home/holiday homes  75%
 Sheltered housing schemes/Retirement villages for elderly  75%

Minimum income

For residential mortgages, the main applicant's minimum income is £16,000, and for BTL mortgages it's £25,000.

New build

We’ll only provide mortgage finance for new build properties if the site is already under construction and the property will be fully completed within 6 months of our first mortgage offer.

For Residential mortgages, the maximum LTV levels are:

  • New build house 85%.
  • New build flat/apartment 80%.

For BTL mortgages, the maximum LTV levels are:
  • New build house 70%.
  • New build flat/apartment 70%.
All new build/converted properties that are less than 10 years old must have appropriate planning permission, as well as an acceptable 10 year structural buildings defects warranty backed by:
  • NHBC; 
  • Zurich Municipal (no longer offered for new property sales); 
  • An alternative warranty provider (see below); or
  • A professional consultant's certificate from a suitable architect/surveyor (they need to be corporate members of the Royal Institute of British Architects or Royal Institution of Chartered Surveyors and have the appropriate professional indemnity insurance).
If the property has an alternative warranty e.g. Premier Guarantee, Building Life Plans, Building Zone, LABC New Home Warranty, Checkmate Warranty, Construction Register Limited, HAPM, Professional Consultant's certificate etc., please speak to your BDM/TBDM before applying to ensure the warranty is acceptable. 

If the new build property doesn’t have a warranty then the application will be declined. 

Builders’ cash incentives also need to be declared at the point of sale, and this can be done via the CML Declaration of Incentives form. We will accept a maximum of 5% without affecting lending; anything above this will be deducted from the lower of purchase price or valuation and the max LTV rebased on this figure.

Non-EEA nationals

We’re happy to accept non-EEA nationals who have an automatic right to reside in the UK and have been living in the UK for a minimum of 3 years, on our standard lending criteria and LTV limits.


We’ll also consider applications from non-EEA nationals without automatic right to reside, subject to full underwriting, for a maximum LTV of 75% as long as they meet the following criteria:
  • They must be living and working in the UK, and have done so for a minimum of 36 months; and
  • They need to have indefinite leave or limited leave, with the right to remain in the UK for a minimum of three years, and with no restrictions on employment. Proof of this can come from any of the following:  
    • A UK Residence Permit (Biometric Residence Permit);
    • A visa stamp in a currently valid passport; or
    • Written confirmation from the Border and Immigration Agency/Home Office.
We’re unable to lend to anyone with diplomatic immunity. 

With BTL mortgages, we’ll only accept applications from non-EEA nationals if they:
  • Have lived in the UK for at least 36 months; and
  • Have a permanent right to reside in the UK

Non-simultaneous sale and purchase

Where an existing property is for sale but won’t be sold before the new mortgage completes, the existing mortgage payment is classed as a credit commitment and must be included in the affordability calculation. In this case, it’s expected that:
  • the existing property will be sold within 3 months of the completion date of the new mortgage; and
  • the customer(s) will move into the new property within 1 month of completion.

Offers

All mortgage offers are valid for 13 calendar weeks from the date the offer was issued, with the exception of those relating to new build purchases which are valid for 26 weeks from date of offer.

In all cases, a mortgage offer will be placed in the customer’s Vault, accessible via our App.

For example:

Standard offer issue date  Offer expires at 23:59 hrs on 
 6th March 2017 5th June 2017
 29th June 2017 28th September 2017
10th November 2017 9th February 2018

In all cases a mortgage offer will be placed in the customer’s document vault, accessible via the Atom App.

All mortgage offers for New Build purchases are valid for 26 calendar weeks from the date that the offer was issued, unless stated otherwise.

For example:
New build offer issue date  Offer expires at 23:59 hrs on 
6th March 2017 4th September 2017
 29th June 2017  28th December 2017
10th November 2017   11th May 2018

Once a New Build offer has expired, it will be cancelled. In order for the case to proceed, a new mortgage application will need to be fully processed and re-underwritten against Atom’s standard mortgage lending criteria. The original mortgage product may not be available and an updated property valuation may be required in some cases.

Other occupiers

Family members and individuals over the age of 17 who aren’t party to the mortgage, but intend to live in the property, need to sign our standard Deed of Consent form. 

If the individual who plans to live in the property provides a lump sum towards the purchase, they must be included on the application. 

Sitting tenants aren’t permitted, however BTL applications where existing tenants will remain in the property are accepted. These will be subject to a new tenancy agreement being signed on completion, unless the conveyancer confirms that the tenancy meets our requirements and is transferrable to the borrower as a successor in title to the original landlord.

Porting

We won’t consider an application to port the mortgage until at least 6 months after completion, unless the customer’s circumstances are exceptional. These applications are subject to full underwriting at the time of porting.

When the redemption of a mortgage doesn’t happen at the same time, it can still be ported if the completion takes place within 3 months. Any early repayment charges (ERCs) will need to be paid, but we’ll refund these when the new mortgage completes. If the customer’s looking to borrow less for their new property, then a portion of the ERC will be refunded. However if the customer is looking to borrow more for their new property, this will be subject to affordability and product availability.

We don’t allow porting on BTL mortgages.

Product switches

Customers can switch their mortgage product either:
  • before it matures e.g. during their existing deal, which will typically incur early repayment charges; or
  • when it matures e.g. when their initial rate finishes.




Properties in need of light refurbishment

If a client is looking to make a BTL application to purchase a rundown property, this may be acceptable but will be subject to independent valuation to verify the property value and rental potential. Please refer all preliminary enquiries to your BDM/TBDM.

Property construction

The property to be mortgaged should be of standard construction type. For example:
  • Walls:
    • cavity outer walls of brick/reconstituted stone with inner walls of brick or block; or
    • cavity outer walls of brick/reconstituted stone/blocks rendered with inner walls of brick or block; or
    • timber framed property with outer walls of brick/reconstituted stone, built in 1970 or after; or
    • timber framed property with rendered outer walls of brick/reconstituted stone/block, built in 1970 or after; or
    • solid stone. 
  • Roof:
    • tile (concrete); or
    • slate; or
    • thatch (reed or straw); or
    • felt, asphalt; or
    • copper; or  
    • lead.

We might also accept some properties built using alternative techniques, so please speak to BDM or TBDM to confirm if the construction method is acceptable before applying.

In all cases a satisfactory valuation report needs to be completed by one of our valuers.

Property location

We’re happy to lend against properties in England, Wales, Scotland and Northern Ireland. 

However there may be some additional restrictions to property located on remote Scottish islands due to restricted demand. If this affects you, please speak to the team first to discuss the suitability of the property before applying.

We don’t currently lend on properties outside the UK including the Isle of Man and the Channel Islands.

Property types (acceptable)

We’ll consider lending on all of the following types of property, subject to additional checks and a manual underwriting assessment: 
  • Flats located five storeys or more above the ground. 
  • Flats above commercial premises - in addition to normal criteria acceptability will depend on:
    • Nearby commercial activities. If any commercial activities in the block are likely to cause a nuisance - noise, smell or unsocial hours - we may not be prepared to lend on the flat; and
    • Access. Some flats over commercial premises have poor access, which may involve passing through the business area, exiting yards containing commercial refuse, or using poorly maintained external stairs. If any of these factors apply we might not be prepared to lend.
  • Studio flats may be considered if they’re located in a prestigious development or location, but we’d need their desirability and saleability confirmed by the valuer.
  • Freehold flats where:-
    • There is a leasehold interest in the flat and the reference to freehold relates to a share of the freehold interest in the block;
    • The other flat(s) in the block are all leasehold; or
    • There are reciprocating lease/freehold arrangements (such as Tyneside Flat).
  • Flying freeholds where this makes up less than 15% of the property where the conveyancer can confirm that subject to confirmation that adequate rights of support and mutually enforceable repairing covenants exist.
  • Properties with over 10 acres (40,000m2) of land will be considered provided the following information is provided at application stage:
    • Full details of the living accommodation; 
    • Total area of land; 
    • Current and intended use of the land; 
    • Number, size, and proposed use of any outbuildings; 
    • Occupation of the applicant(s); 
    • Details of any restrictions on the land or property.
    • Please note: the property won’t be acceptable if it’s subject to any agricultural restrictions, or if the applicants intend to use the land for any agricultural or business purposes.
  • Properties with granny flats/annexes where the acting solicitor confirms that the granny flat or annex will have vacant possession upon completion.
  • Right to Buy where the applicants currently live in the property and can supply their Right to Buy papers.
  • Shared ownership where there are 'stair casing' arrangements in place to facilitate the purchase of further shares in the property (applicants need to supply a copy of the local authority/housing association agreement, subject to a minimum 25% share).
  • Warden assisted dwellings.
  • Modern Timber framed properties.

Property types (unacceptable)

Unfortunately we’re unable to consider mortgage applications associated with the following types of property (please note that this isn’t an exhaustive list):
  • Commercial premises - either full or partial, including live/work units; 
  • High rise ex local authority flats (5 storeys or more);
  • Freehold flats (excluding those noted above);
  • Flats with balcony access;
  • Flats that aren’t self-contained or without independent access;
  • Isolated rural properties with restricted access and limited services;
  • Bedsits;
  • Static caravans;
  • Mobile homes;
  • River boats;
  • Farms;
  • Purchase of land;
  • Entirely timber constructed properties. e.g. log cabins;
  • Pre-cast reinforced concrete construction (unless improved to building regulation standards and confirmed so by a structural engineer);
  • Properties built using Modern Methods of Construction (MMC);
  • Properties constructed with high-alumina cement or containing Mundic concrete;
  • Flying freeholds greater than 15%;
  • Grade I listed buildings;
  • Partially built properties;
  • Properties with no kitchen or bathroom - unless being installed by applicants;
  • Properties with a restricted occupancy clause, e.g. if they can only be occupied for a maximum of 11 months in any one year;
  • Timeshare accommodation;
  • Properties where material environmental hazards are revealed by environmental searches;
  • Properties where there’s ongoing structural movement;
  • Properties where saleability may be adversely affected by an unsatisfactory mining search;
  • Properties excluded from full buildings insurance;
  • Properties affected by planning restrictions or by local planning issues;
  • Properties liable to be subject to clearance or compulsory purchase order;
  • Properties subject to 3rd party interest;
  • Any property deemed unsuitable security by the valuer.
Property types excluded for BTL applications (in addition to those listed above) are: 
  • Studio flats;
  • Properties with more than 5 bedrooms;
  • Sale and leaseback.
Before applying it’s always worth double checking the suitability of the property with our Intermediary Support team.

Property value / purchase price

The minimum and maximum purchase prices that we’re willing to lend against are:

   Purchase Price
 Minimum   Maximum (subject to max. LTV)
Residential    £50,000*    £3,500,000
 BTL  £75,000*  £1,250,000

* Note – where the property is located within the M25 and the property value is less than £100,000 then the application will be subject to additional scrutiny by an underwriter.

Remortgage

When looking to remortgage with us there are a couple of things to consider:
  • The property must have been owned by the applicants for at least 6 months;
  • The applicant can look to borrow the same amount or less as the existing mortgage, or an increased amount including an element of capital raising.
If you need to alter the title deeds as part of a remortgage application, there may be legal costs involved and we always recommend that customers take independent legal advice. Please see Transfer of Equity.

Repayment methods (BTL)

For BTL mortgage lending, we’ll accept applications for:
  • Full interest-only repayment, as long as our lending criteria is met
  • Full capital and interest (C&I) repayment; and 
  • Part and part repayment (i.e. part capital repayment and part interest-only) providing a suitable repayment method is in place.

Repayment methods residential

For residential mortgage lending, we are unable to offer full interest-only mortgages for residential lending; however we will accept:
  • Full capital and interest (C&I) repayment
  • Part and part repayment - (i.e. part capital repayment and part interest-only, up to a maximum of 50% of the loan) providing a suitable repayment plan is in place - this option is subject to availability and is not currently available.
The mortgage must proceed on a full C&I repayment basis when either:
  • The property value is less than £500k; or 
  • The LTV is greater than 85%.
For the mortgage to proceed on a part and part repayment basis, the following requirements need to be met:
  • Maximum total LTV of 85%;
  • At least 50% of the loan amount must be repaid on a C&I repayment basis;
  • Combined useable applicant income of £100,000;
  • Minimum property value of £500,000;
  • The applicant must meet our affordability requirements for the total mortgage on a full C&I repayment basis; and
  • The applicant must be able to prove that a repayment strategy in line with our policy requirements is in place.
Examples of part and part repayment scenarios are:-
Part and part examples:-  Example 1   Example 2    Example 3 
Lower of property valuation / purchase price   £400,00  £550,000   £750,000
Maximum combined loan on part & part basis  Not available (minimum property value not met)  £467,500  £637,500
Minimum amount on C&I repayment (% of loan amount)  £233,750  £318,750
Maximum available on interest only (subject to repayment vehicle)  £233,750  £318,750


Residential minimum maximum loans

  Minimum Loan Maximum Loan (subject to LTV maxima)
 First Time Buyer (FTB)  £25,001  £300,000
 Next Time Buyer (NTB) / Remortgage  £25,001  £2,000,000

Retentions

We currently don’t offer mortgage retentions, we simply base our lending on the current value of the property.

Right to Buy

We’re happy to accept Right to Buy applications as long as they meet our standard mortgage lending criteria.

What you need to know and provide:
  • The maximum loan we’ll offer is set at 95% of the discounted purchase price; 
  • We don’t allow capital raising for debt consolidation; 
  • All applicants must currently live in the property; 
  • You’ll need to supply us with the applicant’s Right to Buy/Acquire papers detailing the discounted price and confirming their eligibility; and
  • We also require a landlord’s reference or evidence of rent payments.
If an applicant receives housing benefit this can’t be used as income to support the mortgage as the benefit won’t continue once the mortgage has completed. Even if the Department for Work and Pensions agree to pay support for the mortgage interest, we still can’t accept this as a form of income.

Second charges

We’ll consider allowing second charges to remain, or to be registered on residential mortgages only if:
  • we are granted the first legal charge over the property; and
  • the applicant(s) complete the appropriate Deed of Priority/Deed of Postponement/Ranking Agreement form.
We won’t allow second charges on BTL properties.

Second home and holiday homes

We’re happy to consider mortgages for a second home or holiday home, providing: 
  • The applicant demonstrates they can support both mortgages that are outstanding at the time of completion;
  • They prove they can afford the cost of running two homes;
  • The property is predominantly for the applicant’s own use, however short term occupation by family and friends will be acceptable; and
  • The property is not to be sublet.
The maximum loan to value available we’ll offer for this kind of purchase is 75%.

Security

A first legal charge (or equivalent) will be required over all property in England and Wales and over all Outright / Scottish ownership property in Scotland.

If a customer has more than one mortgage with us, the standard Mortgage Conditions will include an ‘All Monies Clause’ which secures on the subject property any other debt that may be due to us, whether under this loan or any other lending facility.

Self employment

If an applicant has more than a 20% shareholding in the business they work for, we’ll treat them as self-employed, but if their shareholding is 20% or under, we’ll class them as employed.

Applicants who own a franchise or have a partnership interest in a business will be assessed as self-employed, as will sub-contractors who derive income from more than one contract. In all cases, we might seek references from their accountants.

We’d normally expect applicants to have been self-employed for a minimum of two years (and preferably three years) and for the business to have been profitable throughout that time. However we may consider an application where they’ve been self-employed for a minimum of two years.

Income for affordability is taken as follows:
  • Where net profits are increasing or static, we’ll take an average of the last 2 years; 
  • Where net profits are decreasing, we may consider taking the most recent year’s profit into account, providing we’re satisfied that the ongoing business and income level can be sustained.

Self-build

We don’t currently accept applications for mortgages against self-build properties.

Shared equity

Although we don’t currently accept applications for shared equity, we’re able to support shared ownership mortgages.

Shared ownership - not currently available

We’ll consider applications from customers looking to buy a property via shared ownership schemes, e.g. as part of a properly structured and marketed shared ownership (such as those in association with a registered social landlord, e.g. a Housing Association, Local Authority or national/regional builder). For the list of approved providers please refer to the following sites for:

Although the applicant(s) won’t initially own 100% of the property, the scheme must allow for them to staircase up to full 100% ownership. Reverse staircasing isn’t acceptable.

With regards to shared ownership:
  • Our standard mortgage lending criteria will apply to the share that the applicants are initially applying for; and
  • We’ll lend up to 95% of the share amount being purchased, subject to a minimum transaction at each stage of 25% of overall purchase price.
  • Please note: our solicitors will need to check a copy of the Housing Association/Local Authority agreement. 
  • Please make sure the client is aware that there will be additional legal costs on a shared ownership transaction.
  • If at any time the scheme gives the borrower the right to buy out or repay the scheme provider's equity percentage, then this must be at open market value.
  • Capital raising for the purpose of debt consolidation isn’t permitted.
Shared ownership isn’t applicable for BTL mortgages.

Sheltered housing schemes / retirement villages

We’re happy to consider applications for residential properties in sheltered housing schemes or retirement villages.

The maximum LTV available on these is 75%, and the full property lease and restrictive covenants must be approved by our solicitors and valuers.

Short term loans / Payday loans

Short term loans are sometimes associated with customers in financial difficulty or with very limited disposable income on a month to month basis. 

Atom recognise however, that this is not always the case and is willing to consider applications with no more than 3 short term loans within the last 6 months providing affordability is strong, the applicant(s) shows no signs of credit pressure and subject to satisfactory credit score. 

Solar panels

We will consider properties with solar panels where the applicant(s) are funding the purchase of panels themselves or via additional borrowing, provided they are doing so with no creation of any long term lease arrangement with the panel provider. 

We won’t lend on a property where the panel provider is supplying and fitting panels free of charge, is taking income from the grid tariff scheme and is creating a long term lease against the roof and roof air space.

Specialist reports

In certain situations the valuer might request a specialist property report prior to the mortgage being offered. 

When this happens, we will ask the customer to arrange for the appropriate report to be completed and we’ll arrange for it to be forwarded to the original valuer for comment. The customer will be responsible for covering the cost of the report and for ensuring, where applicable, that the individual completing the report holds the qualifications required by us. Please be aware that providing a specialist report does not guarantee that the property will be acceptable to us as security. 

Where the valuer requests a structural engineer’s report the customer must ensure that the individual completing the report is a member of either the Institute of Structural Engineers (www.istructe.org.uk) or the Institute of Civil Engineers (www.ice.org.uk). They must also hold one of the following qualifications:
  • Structural Engineer (M.I.C.E, F.I.C.E, M.I. Struct E or F.I Struct E.). 
  • Chartered Building Surveyor (M.R.I.C.S. or F.R.I.C.S.). 
  • Corporate Building/Corporate Structural Engineer (M.A.S.I., F.A.S.I, MBEng., FBEng., M.C.I.O.B. or F.C.I.O.B.).
All other specialist reports need to be prepared by a reputable firm (please refer to valuer for guidance if in any doubt). Some examples of the types of report that our valuer might request, and the qualifications the individual completing the report must hold are listed below:-
  • Cavity wall tie: 
    • Member of the Federation of Master Builders or Member of the British Wall Tie Association.
    • Members of the Wall Tie Installers Federation.
    • Property Care Association (PCA).
  • Damp & Timber: 
    • Property Care Association (PCA).
    • Chartered Building Surveyor (MRICS/FRICS).
    • Member of the Institute of Chartered Engineers or Member of the Institute of Structural Engineers.
  • Drainage: 
    • Specialist contractor with review/recommendations by a Member of the Institute of Chartered or Structural Engineers.
  • Electrical:
    • Member of the Institute of Electrical Engineers.
    • Member of the National Inspection Council for Electrical Installation Contractors.
    • Certified by one of the following bodies:
      • BRE Certification Ltd.
      • ELECSA Limited.
      • NAPIT Certification Ltd.
      • NICEIC Group Limited.
      • British Standards Institution.
  • Gas and central heating:
    • Gas Safe registered.
  • Japanese Knotweed:
    • Property Care Association (PCA) – Invasive Weeds.
  • Tree / Arboriculturalist: 
    • Structural Engineer.
    • Professional Member of the Arboricultural Association.

Sub-contractor

If the applicant is a sub-contractor we’ll require:
  • A copy of their latest contract;
  • Evidence of a regular income flow from contracts over the last 2 years;
  • An accountant's certificate or HMRC self-assessment form (SA302s or Online Tax Calculations) to confirm their income and salary over the last 2 years. 
Where an accountant's certificate is supplied, our standard form should be used and it must be completed and signed by a professionally qualified Associate or Fellow from one of the following accounting 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);
  • Association of Accounting Technicians (AAT); or
  • Institute of Financial Accountants (IFA).
If the accountant doesn’t have the relevant qualification, the corresponding SA302 tax assessments issued by HMRC should be supplied instead. 

In either case, to determine mortgage affordability we’ll need to look at the last 12 months’ net profits, or an average of the last 2 years’ self-employed income, then use the lower of those two figures when applying.

Sub-sale transactions

We don’t currently accept applications for sub-sale property transactions.

Tenure

We welcome applications for properties with the following tenure:
  • Freehold/Outright (Scottish) Ownership properties (except flats and maisonettes); and
  • Leasehold properties, provided that the lease has at least 80 years unexpired term at outset of mortgage and 50 years unexpired term at expiry of mortgage.

Where the property has a flying freehold, this is usually acceptable providing it does not exceed 15% of the property. 

We’re unable to lend on commonhold properties, and any applications for these will be declined.

Term

The minimum term we offer is 2 years, however if the customer selects a 5 year fixed rate, the minimum term will simply match that actual product, in this instance, 5 years.

The maximum term available is 35 years.

The Atom Bank App

Each applicant must download the App from their app store in order to accept, complete and service their mortgage. 

The applicant will need a compatible device to be able to download the App.

Although we’re not restricting the device your customers can use our App on, it’ll only be optimised for those we’ve mentioned in our FAQs, so some things may not appear as they should if they use it on another device.

A mortgage code will be issued to each applicant by email / SMS. They will need this to access information about their mortgage in the App. 

The App can be downloaded at any time during the application process but must be downloaded by offer stage or we will be unable to complete the mortgage

Once the applicant has downloaded the App they will be asked to complete the registration process, during which we will capture:-
  • FaceID – a scan of their face;
  • VoiceID – a recording of their voice;
  • Passcode: a six-digit passcode.
We encrypt the transmission and storage of FaceID and VoiceID; more information is available in our App T&Cs, which your customer will accept when they download the App. Once set up on the App, the customer can check the status of their mortgage application, access mortgage documentation, and accept the mortgage offer.

Transfer of equity

We usually accept applications where a party is being added or removed from the existing mortgage (a transfer of equity - ToE), subject to normal lending criteria. 

Existing customers may request a ToE on their mortgaged property to add a new party to, or remove an existing party from, the mortgage. In this instance you’ll need to add the relevant background details on the customer's file. Conveyancing fees will be payable in this instance.

A party being added to a mortgage will be treated as a new mortgage applicant and require full evaluation against our lending criteria.

Transferring from residential to Buy To Let (BTL) mortgage

If one of our existing customers wants to permanently change their mortgage type (e.g. from residential to BTL) they’ll need to apply for one of our specific BTL mortgages. When they do that, they’ll be reassessed against our BTL lending criteria, including rental cover affordability.

Unacceptable loan types

We won’t lend against the following types of property transaction:
  • Lifetime mortgages;
  • Bridging loans;
  • Assignable contracts;
  • Back to back transactions; 
  • Self build;
  • Sub-sale transactions.
In addition, we won’t consider BTL applications for shared ownership.

Valuation appeals

Our panel of regional valuers is highly experienced. So no matter what the location of the property requiring a mortgage, we’re very confident that the valuation they provide will be an accurate reflection of its true market value.

We are therefore unable to accept any appeals against the capital valuation of the property.

We’re more than happy to review the rental valuation for established BTL remortgage applications where the property is already tenanted and the rental amount exceeds that quoted by the valuer. This is providing that evidence can be produced to demonstrate that the rental amount is sustainable beyond the existing AST term. If this is the case and you’d like to challenge or appeal a rental valuation decision, please contact your Atom BDM/TBDM to discuss.

If your client has an unusual property or you have any other concerns then contact our dedicated Intermediary Support team on 0333 399 0055 or your BDM.

Valuation fees

If a physical valuation report is required, we work to the following mortgage valuation fee scale:

 Purchase price/ est. value up to   Mortgage valuation report   Homebuyers report   Building survey 
 £100,000
£155 £345 £825
 £150,000 £185 £375 £855
 £200,000 £220 £410 £890
 £250,000  £280  £440 £920
 £300,000 £280 £470 £950
 £350,000 £350 £495 £975
 £400,000 £350 £535 £1015
 £450,000 £425 £570 £1050
 £500,000 £425 £585 £1065
 £550,000 £500 £645 £1125
 £600,000 £500 £645 £1125
 £650,000 £600 £695 £1175
 £700,000 £600 £695 £1175
 £750,000 £600 £775 £1255
 £800,000 £700 £775 £1255
 £850,000 £700 £815 £1295
 £900,000 £700 £815 £1295
£1,000,000 £770 £875 £1355
 Over £1,000,000 Available on request  Available on request  Available on request 

Transcripts of Scottish Valuations are currently unavailable but will be very soon, if meeting our criteria they will be charged at £30 (including VAT).

Valuations

Every property used as security requires a valuation. 

For some remortgage applications, where the application meets our criteria, we may use an automated valuation model (AVM) to determine the value of the property. However where it is not possible and a physical valuation is needed we'll ask a valuer from our approved closed panel to complete an internal and external inspection of the property. This basic valuation assesses the suitability of the property for mortgage purposes only. While it’s instructed by us and is purely for our use, copies will be sent to both the applicant and the solicitor.

For customers who’d prefer a more detailed valuation report, we can instruct the valuer to complete one for the customer alongside any physical valuation that we might instruct. There are two types we can offer:-
  1. Homebuyer Report: This is an internal and external inspection of the property. The report provides an account of the property’s condition and highlights any problems using a traffic lights rating system. It’ll include advice on defects that may affect the value of the property with comments on repairs and ongoing maintenance. 
  2. Building Survey: This is an in depth analysis of the property’s condition. It includes advice on defects, repairs and maintenance options, and should be considered essential for larger or older properties, or if the applicant is planning major works.

More information on the types of survey available can be found on the RICS website.

Scottish Transcripts: Not currently available - coming very soon!

In Scotland, the valuation will usually have been completed before we receive the mortgage application. In these circumstances, we’ll accept a transcript valuation for a residential property (non-BTL), providing:
  • The valuer is on our approved panel and was randomly assigned; and
  • The inspection was undertaken within the last 3 months.
In all other cases a new mortgage valuation will be required. Please note, we don’t accept retypes or transcript valuations in any other circumstances.

We have carefully selected our panel of valuers and are therefore unable to accept any requests to add new valuers to panel.