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12th May 2014
The weekend press has been full of a number of examples of borrowers who have been affected by the Mortgage Market Review. In some instances those who obtained an Agreement in Principle at one level, when they finally agreed on a property after the new rules came in, found that they could not borrow the same amount. One instance the difference amounted to £100,000 less!
The issue of course is that lenders are now looking at all monthly expenditure so there is more that is now taken into account than may have been done previously. This is especially true where dependent children, school fees and pension contributions are concerned.
High service charges on new properties are also now taken into account and when added to the higher stress tests that are taking place, some borrowers may be looking with disappointment at their proposed maximum lending figures.
In other words, all those prospective buyers who are still looking should therefore get back in touch with their lenders or brokers if their agreements were made before 26th April to check they are still playing in the right ballpark.
The good news however, is that for some borrowers, especially those who have been careful with their outgoings, there may be a pleasant surprise in store.
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.