Following the introduction of the Mortgage Market Review (MMR), a specialist mortgage consultant is seeing a significant increase in the time taken to complete mortgage applications.
The MMR, led by the Financial Conduct Authority, aims to reform the mortgage market so that it is sustainable and works better for consumers.
The new changes have been implemented to ensure the continued access to mortgages for consumers, while preventing unsustainable lending practices.
Sarah Robinson, senior consultant at Ludlow Wealth Management, said: “The changes brought about by the MMR mean that the responsibility to assess whether the customer can afford the loan is with the lender, when previously this was left with an intermediary.
“Lenders must take into account income, current expenditure and future expenditure when processing an application, as well as factoring in the ability to make their monthly mortgage payments should interest rates rise. Applicants verifying their incomes must provide up-to-date and relevant information including their last three monthly pay slips, bank statements and a P60.
“As lenders comply with the new guidelines, the time taken to secure mortgage finance is increasing. This is due to the additional information they are requesting and the additional affordability tests mortgage applications are being put through.”
She added; “Borrowers opting for mortgages based just on cheap interest rates and not selecting a product which is suited to their individual circumstances and that fits in with the lender’s criteria, have seen their application refused. This then makes searching for another mortgage product much tougher.
“A mortgage consultant’s knowledge of the marketplace and lenders’ criteria is very powerful post MMR and can make the difference in securing a mortgage for house buyers.”