The Mortgage Market Review – what does it mean for you?
You may have read or heard about what the media has described as the ‘new lifestyle quiz to secure a mortgage’ – the Mortgage Market Review, which came into effect on 26th April.
Whilst there is no doubt that potential mortgage borrowers will face tougher questions from lenders about their income and expenditure before being granted a mortgage, there should be no reason to panic as the changes are designed to help lenders make better decisions and protect consumers from the kind of irresponsible lending that might leave them unable to meet mortgage repayments in the future.
In our view, there are 4 major impacts of the changes which could affect you.
- Lenders will ask more rigorous questions about your income and outgoings and may require sight of your Bank Statements.
- Some lenders have tightened their affordability calculators to ensure that you could still afford the mortgage if interest rates increased over the next 5 years.
- There will be more ‘advice’ sales so anyone arranging a mortgage directly with a Bank will only get ‘advice’ and be expected to attend an interview longer than it was previously. This will also apply if you are also trying to take a new product when your existing deal ends.
- Because lenders have made a number of system and processing changes to implement the Mortgage Market Review, we are finding that the application process is generally taking longer than usual.
What can you do?
There has never been a more important time to take the advice of an independent mortgage advisor, who will be able to assess your position and recommend the best way of approaching the mortgage application process. An experienced professional will be able to provide the advice you need for you to make the right decision and then take the stress out of the application process by selecting and working with the most appropriate lender on your behalf. We can’t promise it, but going through an independent mortgage advisor is likely to make the mortgage application experience a lot less stressful!
Your home may be repossessed if you do not keep up repayments on your mortgage.