Changes are announced to Virgin interest-only mortgage criteria.
From Monday 09 December, Virgin's interest-only mortgage productss will be restricted to applicants with a minimum £100,000 income.
This figure includes bonuses, and applies to property up to a maximum value of £500,000. The maximum property value increase is £200,000 more than Virgin’s previous interest-only loan size.
The lender advises that it still thinks interest-only mortgage products are appropriate. However it is only willing to consider applications from more experienced customers, able to demonstrate that they are confident in repaying their mortgage through an evidenced repayment plan.
Virgin will no longer accept applications from first-time buyers. They also will no longer accept the use of cash ISAs or the sale of a mortgage-holder’s primary residence as a repayment vehicle.
Repayment vehicles that will continue to be accepted include personal pension plans, investment plans, endowment policies, a share portfolio and the sale of a property other than a primary residence.
A spokesperson for the lender commented advising that over the past year most lenders have tightened up their interest-only mortgage criteria, and some have even pulled out of the market altogether. Virgin believes that its restrictions are a good alternative to pulling interest-only products from its range.
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