“They say that moving house is one of life’s great stresses. So the Mortgage Market Review (MMR) regulation introduced last year may be viewed as adding more stress to most home-buyer’s woes.
It is true that MMR has made it incumbent on all mortgage lenders to critically assess the affordability of a mortgage application both now and in the future, to anticipate potential increases in interest rates. Lenders also need to be able to establish in the case of an interest only mortgage that, subject to status, the borrower has or will have the means to repay the capital from a clearly identified source of funding.
However such regulation is also put in place to protect borrowers, to ensure that the amount they apply for is appropriate based on their circumstances and is unlikely to put them under pressure in the future if rates do rise.
This may all seem arduous, on top of the form filling and mortgage interviews, but being prepared for the process can save time and enable buyers to concentrate on assessing properties which fall within their price range.
Given that MMR impacts on all lenders regulated to sell Regulated Mortgage Contracts (RMC) then the process for mortgage customers will be very similar whether the mortgage interview is conducted by telephone or face-to-face. Ahead of any first meeting or application I suggest you ensure you have considered the following:-
- That you have available your financial records extending back a minimum of six months, such as bank statements and mortgage statements.
- Have copies of earnings such as salary slips available and, if self-employed or a business owner, copies of tax returns and financial accounts for the business.
- Have critically assessed your level of regular expenditure over an average month. This applies not just to usual outgoings, such as mortgage payments, council tax and utilities, but also discretionary expenditure such as holidays, clothing and leisure. Take an average based on costs over 12 months. Ultimately the lender will be looking to demonstrate a monthly surplus, based on current and possible future rate rises, having deducted the total of these costs against proven net monthly income.
For more information about Handelsbanken Sevenoaks and the full range of business and individual services we offer, please visit our website – www.handelsbanken.co.uk/sevenoaks. Alternatively, you can contact me on 01732 452 920 to arrange a chat about your banking needs.”
1st Floor | 50-52 London Road | Bligh’s Meadow | Sevenoaks | TN13 1AS
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.