LAST month the Mortgage Market Review — or MMR — was introduced to ensure people take out a mortgage they can afford instead of overstretching their budgets.
The new reforms involve lenders conducting thorough screening processes to double check that borrowers can definitely afford their projected mortgage repayments, based on their specific incomings and outgoings.
The two main changes are that customers looking to get a new mortgage to buy a home, increase their current mortgage or remortgage need to prove that they can afford the mortgage. In order to borrow an interest-only mortgage there will need to be a credible repayment strategy.
Greg May, mortgage services director of Romans estate agents said: “We’ve always put affordability at the forefront of our mortgage advice and we were obtaining evidence of income prior to the rule changes, so the way we work with our clients hasn’t been altered much by the new MMR.
“However, lenders now require a more detailed picture of their clients so we’re working even harder to obtain as much of the relevant documentation and paperwork upfront to support each application and minimise any disruption caused by the new regulations. This will ensure our clients are able to proceed as quickly as possible with their purchase or remortgage.
“One of the biggest changes we’ve seen is the amount of time we’re left on hold waiting to get in touch with the lenders, which can be up to an hour, although this is slowly improving as the lenders get used to the new rules.
“Our customers don’t need to worry about this though as we contact the lenders on their behalf and conduct all of the administration tasks, saving them a lot of time and frustration.”
Brokers recently told Mortgage Strategy, a mortgage trade publication, that delays from lenders, conveyancers and surveyors are pushing completion times back by several weeks or even months in some cases.
Romans is recommending that anyone looking to get a new mortgage, or change their current one, should start the process sooner rather than later.
Romans mortgage services’ advisers guide their customers through the entire mortgage application process.
To find out more and book an appointment with a local adviser talk to the team at your local Romans branch or visit www.romans.co.uk/mortgages