The changes that came into force regarding mortgage lending at the end of April have been a hot topic in the press this past month. http://www.heraldscotland.com/business/personal-finance/tougher-rules-will-hit-buyers-looking-for-loan.24054191 The main change brought in by the Mortgage Market Review (MMR) is that people now have to go through more stringent affordability checks and to provide more information about spending levels. But will this affect the number of people getting mortgages and what effect will it have on property prices and the general market?
The general consensus amongst commentators in the press seems to have been ‘no’, not if your finances are in good order and you can demonstrate that you will be able to afford your mortgage. Press reports show that mortgage brokers are generally optimistic about the market http://www.propertywire.com/news/europe/uk-mortgage-market-confidence-201405269165.html
However, early indications are that the main effect on the property market will be the amount of time that it takes to get a mortgage. The information that the lenders require is more in-depth. However, the main issue seems to be that, as a result of the doing-away-with of non-advised sales, the length of time that it takes to get an appointment with a mortgage lender is, in some cases, currently several weeks. If you are hoping to stay with your current mortgage lender or to borrow from your own bank and you are hoping to make an offer on a property quickly in the full knowledge that the financial side of things stacks-up…well, it’s not a terribly positive picture if you have to wait 6 weeks for an appointment!
As a result, independent mortgage advisers are reporting that they are busier than ever. Whereas your lender may keep you waiting several weeks, many independent mortgage advisers will still be able to see you in a matter of hours or days. Moreover, many of them offer free mortgage advice and can also compare your current favoured deal with everything else out there in the marketplace. The processing times with many lenders are certainly longer now that the MMR has taken place, however they are busier than ever as a result of buyers simply not being able to wait for weeks to see their lender.