The Real Impact of MMR

The Real Impact of MMR

I’m finding on a daily basis that our customers are seriously concerned about the impact that MMR will have on the ability of them getting a mortgage.  Although the Mortgage Market Review has been on the agenda for a couple of years, the press don’t appear to have picked up on this until the implantation deadline last month (26th April 2014).

Whilst the press have focused on the fact that lender criteria and approach may now seem intrusive; within the industry I think we’re all quite positive about MMR and that lenders are taking a more responsible and appropriate approach to lending.

Banks will now have to lend to their mortgage customers based on what is affordable, not purely on an income multiple of 4-5 times.  Surely this is a positive change?!

For those with a fairly frugal lifestyle with moderate outgoings and thus have a reasonable level of disposable income each month should have no issues in obtaining a mortgage, it may just take a little longer than it might have previously due to checking through bank statements etc that they may not have done before.

However, anyone with a more extravagant lifestyle with lots of financial commitments and outgoings and limited disposable income won’t find it any harder to obtain a mortgage but they amount lent maybe a little more restricted than it was before – but surely this is a good thing?!

On the contrary to common believe, banks don’t want to have to repossess – it’s expensive and it doesn’t look very good!!  Mortgage Market Review is just another step to try and ensure that money is lent more responsibly and repossessions are kept to a minimum when interest rates start to rise.
If you have any concerns about applying for a mortgage, please don’t hesitate to contact one of the team.

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