According to a report by the Council of Mortgage Lenders, nearly half of all lenders now use credit scoring, while more than half use an affordability model, compared to around only 10% in 2000.
Almost all lenders who use an affordability model say that they are responding to regulatory guidance, while two thirds of lenders expect to be using an affordability model within the next few years. Around 30% of lenders now use an automated valuation model saying that one of their main reasons was to speed up the decision making process.
Almost 70% of big lenders, 38% of medium sized lenders and 33% of small lenders reach a decision in principle within 10 minutes.
Our view
The requirement to check suitability and affordability was introduced when the Finanial Services Authority started to regulate mortgages in October 2004. 'Affordability' was introduced and is now becoming the standard check as to whether you should obtain a mortgage or not.
Need a mortgage? Let us search for you.