What will the proposed mortgage reform mean for home-owners?
The FSA has proposed mortgage market reform as a way of doing away with irresponsible lending.
The Mortgage Market Review plans to introduce various changes. The ways in which would-be borrowers and remortgaging home-owners will be affected depends largely on the type of mortgage they require.
Interest-only mortgage deals are to become a thing of the past with most mainstream mortgage lending to be on a capital repayment basis.
Interest-only deals will still be considered for equity or cash rich buyers but an adequate repayment vehicle will need to be proved.
Some argue this is a positive development as it is a way to prevent home-owners from taking too much risk, however some argue that it is a home-owner's choice to take a risk.
The MMR also propose that lenders should ask in depth questions when working out if a borrower can really afford their mortgage repayments.
Some say the extent to which lenders could be required to probe into a would-be borrowers financial affairs is a step too far. After all who really knows how much they plan to spend on birthdays and Christmas at the start of each year?
As for proof of income, self-certification mortgages will no longer be made available. Fast track mortgages are also to disappear and self-employed borrowers could find themselves either jumping through hoops to be accepted for a deal or just simply refused.
Not all the news is bad as it is proposed to allow room to move in the new regulations to allow existing interest only mortgage holders to get new deal without meeting the new criteria.
Deal Direct are up to date on lenders changing criteria and are well placed to work out which lender is most likely to view your application in a favourable light.
With proposed changes in mortgage regulations we recommend that you contact skilled advisers at Deal Direct to source you a deal.
