How FSA rules could affect remortgage deals.
The number and variety of remortgage deals may be affected by the introduction of tougher rules by the Financial Services Authority.
Lending criteria has gradually become more strict, both as a result of the financial crisis and in anticipation of new FSA regulations. The new rules have been announced to come into play in April 2014 rather than 2013 as expected.
New rules are likely to reinforce stricter lending criteria, as lenders will be required to ensure loans are affordable for borrowers. The main principle of the regulations is to make sure that home buyers do not take loans that they cannot afford.
If you have an interest-only mortgage and need a remortgage deal, the new rules could make it more difficult. The increase in a property's value can no longer be relied on as a means to repay a loan. The ability to repay will need to be demonstrated by home buyers to secure a mortgage.
If you are unable to get remortgage deals by switching lenders, other rules are being introduced to ensure you are treated fairly. Lenders must not take advantage by treating you less favourably, or offering worse rates or terms, than other similar customers.
The FSA advised that there will not be any age limit for home owners taking out a mortgage. The ability to afford the mortgage will determine the age to which a home owner can borrow. However, some lenders already impose age limits as part of their lending criteria.
Deal Direct can offer the latest remortgage deals at the lowest rates available throughout the mortgage market.
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