Mortgage Application Questions

Mortgage Application Questions.

The Mortgage Market Review (MMR) takes effect from midnight tonight.

What is MMR?

Following the credit crunch issues, toxic debt problems and bank collapses.  The mortgage industry has been the subject of a complete and total review by the financial industry regulator, the Financial Conduct Authority.

The simple position is much more scrutiny is now required when assessing your mortgage application.  Suitability and affordability is key.

It has been claimed that some lenders will assess all your monthly lifestyle expenses even asking how much your spend of cleaning products, gym fees and broadband.  Having calculated your expenses many lenders will then test whether you would still be able to afford your mortgage if interest rates increased for example from 3.5% to 7%.

Comment

As advisers, we are already experiencing problems in securing some clients mortgages.  We have a duty to secure the most attractive mortgage deal for you but we also have a responsibility to secure you a mortgage that you can afford in difficult times.

The difficulty is securing a mortgage now, is not just raising a significant deposit and rising property prices, it is also about affording the mortgage if interest rates double and treble.