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.