Mortgage
rules

The purposes for which the mortgage loan may be used

Chelsea Building Society can only accept applications for the purchase or re-mortgage of your main residence. Portability/Additional lending/Transfer of Equity applications must also be secured on, and in relation to, your main residence.

Mortgage applications for the purchase of a property for a student/dependent relative or as a second home/pied a terre, Holiday home or Buy to Let property are not acceptable.

Remortgage Applications

Any lending is based on the current value of the property or estimated future value of the property. You should also be aware that at least one applicant must have owned and lived in the property to be re-mortgaged for a minimum of 6 months before the date of your application.
We will require a solicitor to act for us for all remortgage applications.

The following purposes are acceptable for remortgage applications:

• Raising capital (except for business purposes)
• Home improvements
• A replacement of your existing mortgage with no additional borrowing
• A replacement of your existing mortgage with no additional borrowing (second charges)

Additional Loan Applications

We may require a solicitor to act on our behalf, depending on the purpose of the loan.

Additional Loans can be used for any of the following:

• Home Improvements
  Available for alterations, improvements and repairs to the property, subject to normal lending limits and credit score. Additional lending will be based on the current value of the property looking at the HPI or an Internal Inspection provided by one of our panel valuers.
  We will require estimates of any home improvement work before its carried out.
• Purchase of Non Adjoining Land/Holiday Home
• Purchase of Adjoining Land
• Transfer of Equity/Purchase of interest
• Extension of Lease
• Purchase of share in freehold interest

The form of security we require

We always require security for a mortgage loan in the form of a first legal charge over the customer’s property.

Properties located in England, Wales, Scotland and Northern Ireland are acceptable.
Properties located in the following areas cannot be accepted:

• Isle of Man
• Channel Islands

Freehold, Commonhold, Heritable and Leasehold properties are acceptable.
For leasehold properties the following must apply:

• There should be at least 85 years unexpired lease remaining at the start of the mortgage application
• There should be at least 35 years unexpired lease remaining after the expected redemption date

We will use any ground rent or service charges you will have to pay in relation to a leasehold/heritable property in our affordability assessment. We will need to see either sales particulars, a letter from the estate agent, bank statement (for remortgages) or, a solicitor's letter as proof of the monthly payment.

The following property types are unacceptable:

• No internal bathroom and W.C. or kitchen (unless to be installed prior to completion, cover by way of retention)
• Liable to be subject to clearance or compulsory purchase order
• Freehold flats and maisonettes
• Agricultural properties with restrictive covenants
• Isolated rural properties with restricted access and services
• Residential property divided into bed sitting rooms
• Pre-cast re-enforced concrete properties, designated under the Housing Act 1985, part xvi, unless they have been repaired by PRC Homes Ltd, a subsidiary of the NHBC
• Studio and Basement flats
• Flats with balcony access i.e. access via covered walkway
• New build maisonettes/apartments/flats where the LTV exceeds 85%
• New build houses where the LTV exceeds 85%
• Live/Work properties
• Shared ownership
• Right to Buy
• Ex local authority within any pre-emption period
• Timeshare accommodation and Holiday Homes
• Dwellings of totally timber construction i.e. not clad with brick, stone etc, including the log cabin/chalet type of construction
• Partially built property
• Buy to let (BTL)