The Mortgage Market Review
The biggest news story of the last few months has to be the Mortgage Market Review, implemented on 26th April. This is the biggest change in regulation for many years.
Firstly we must clarify which mortgages are affected. The MMR changes are all about protecting customers using their own home as security for the loan and therefore only affect residential mortgages, and not buy-to-let mortgages or second mortgages.
A mortgage lender must (be seen to) thoroughly check your ability to afford repayments both now and in the future. More details are needed about income and outgoings, and the lenders will also ‘stress test’ how a rise in interest rate could affect someone in future. MMR is intended to enforce the principal of ‘acting in the best interests of the client’, which is something that in my years in the industry I’ve worked hard to prioritise and to promote. Although this has marginally slowed mortgage application processes, it’s good to see the principal applied.
One of the most significant MMR changes, and one which is very much welcomed, is that advice must be given before the mortgage is taken out. This can be offered directly by the lender, but some expecting 2 or 3 interviews at 2 hours each! A better source of advice, and a more time efficient option, is to speak with a mortgage advisor that can offer an overview of the market and research multiple products and providers. Of course I’d like that to be Moving Experience, and in addition to advising and submitting the mortgage application, we’re able to help in other areas too.
As pension rules change early next year enabling investors to access lump sums from their pensions, the residential property market could see an increase in properties being bought by those over 60 who want to generate an income from the Buy to Let market. It’s likely that these investors will be buying in cash which will inevitably put more pressure on the system especially when we are seeing price increases due to a supply / demand imbalance, and ‘the silvers’ will fuel this. So if you are considering a Buy to Let property you might want to think about is purchasing before the end of this year, to avoid disappointment. Of course speak to us about mortgages and insurance.
Source of information www.bestadvice.co.u/new-generation-slver-landlords