“Success depends upon previous preparation”
Confucius
New Affordability Rules
When the Mortgage Market Review (MMR) came into play on 26th April it created mixed feelings, this is more commonly known as ‘new affordability rules’ in the news. While people agreed that, in theory, it was a good idea to make more detailed enquiries around mortgage applications, there were many concerns flagged.
We raised some of those in our last month’s newsletter:
- A lengthier mortgage process
- More detailed checks around day-to-day expenditure
- A ‘stress test’ to ensure you could afford repayments, if interest rates rose.
Two Months into the New Rules….
Two months into the new rules and we have noticed some common areas affecting the amount prospective borrowers are able to borrow.
These main points are as follows:
- Child care costs
- Travel costs
- Property maintenance and service charges
- Other deductions from payslips
Number One Mortgages Top Tips for Success
We want to help you get better prepared. Even if you’re not thinking about re-mortgaging or moving at the moment, you need to think about these things now to ensure you can successfully negotiate MMR in the future.
Try to:
- Pay down debt from loans and credit cards, before you make an application
- Avoid any unauthorised borrowing or exceeding your overdraft limit
- Clean up your household budget by cancelling any unused subscriptions, reviewing your monthly utilities bills and nonessential outgoings where possible in order to lower monthly costs
- Review your bank statements, is there anything that lenders may question? Payees are identified on your statements and lenders could be looking at the last six months’ worth, for example, be aware of gambling companies.
Knowledge is Power
We suspect that many people will be affected by these new changes but it’s never too early to begin planning. It’s top priority for us to make sure that our clients are fully prepared and will have access to the funds they need in the future. Contact us now on 01273 736536 or by emailing info@numberonemortgages.co.uk for early advice and it could make all the difference