HSBC has made a number of changes to its mortgage offering as lenders continue to adapt or the coronavirus (COVID-19) crisis.
The lender will be making changes to its income assessments for residential mortgages and with immediate effect brokers will need to ask applicants if their income is impacted by COVID-19.
For pipeline applications (received before 7 April but have not yet reached offer stage), HSBC will proceed as stated unless the broker informs them of a change to the applicant’s financial situation.
For post-offer applications, HSBC will continue as stated unless the broker informs them of a change to the applicant’s financial situation in which case the new application guidance will apply.
Where an applicant has been furloughed by their employer, HSBC will assess affordability based on 80% of basic income up to a maximum of £30,000 per year gross. Brokers are asked to input the furloughed income in the application.
Where top-up income is being paid by the employer, the affordability will be based on the level of income being received.
Evidence will be required to validate both furloughed and top-up income.
Additionally bonus, commission and overtime will no longer be an eligible source of income with the exception of NHS employees where variable pay/overtime will be acceptable based on pre-March 2020 levels.
For sole traders, partnerships and limited liability partnerships with less than 200 partners, the latest three months’ worth of business bank statements are required for all customers.