The mortgage market review is the most important piece of mortgage legislation to be released in a decade.
In the past, people have been able to take out mortgages that they clearly could not afford. On 26th April 2014, new rules were implemented to try and ensure this doesn’t happen.
The new rules only apply to residential property and not ‘buy to let’ and second homes.
When an application is submitted the lender will assess your incomes as before but there is now a bigger emphasis on outgoings. This is to make sure the debt is affordable, not only now but also into the future. They will also try to assess what effect an increase in interest rates may have on your ability to pay.
Generally, a combination of 3 month’s payslips and bank statements are used to determine this.
There has been a lot of misinformation about what items are taken into account but, with a common sense approach and a little preparation, getting a mortgage should be no more difficult. Follow our advisers advice, we can make your life easier.