No, not Measles Mumps Rubella, but the Mortgage Market Review. This has led to significant changes in the mortgage process, with the net result that borrowing money has become much harder. It is now the responsibility of the lender, rather than the adviser, to assess affordability, whilst every adviser or seller is required to hold a relevant mortgage qualification. Because of the more stringent criteria now imposed, it is essential for borrowers to seek specialist independent advice and guidance, not only to ensure that they obtain the most appropriate mortgage, but to ensure that they are not subsequently disadvantaged.
Lenders will quite happily carry out numerous and random credit checks on unwitting applicants, which can have the effect of reducing their credit score and, subsequently, the likelihood of obtaining a mortgage. One of our long-standing clients discovered that, after taking out an American Express credit card, Amex had set up the direct debit to collect the monthly payment after the actual due date. This resulted in him defaulting for three consecutive months through no fault of his own which, in turn, led him to being declined by several lenders when applying for a mortgage. Only by using one of our valued lending connections were we able to identify and resolve the problem to the client’s satisfaction. Whilst we were ultimately able to achieve his aim of securing a mortgage it did, nevertheless, restrict his choice of product and facility.
You can check your credit rating by subscribing on-line to Credit Expert, which is run by the Credit Ratings Agency, Experian. This does not have to cost you anything as it usually offers one month’s free trial. Incidentally, with the likelihood of a rise in interest rates at some stage next year, it may be worth looking to secure at least a two year fixed rate facility if you are remortgaging or looking to move. Whilst a five year rate could be tempting, it is a long period of time, certainly for younger practitioners, whose circumstances could change quite quickly.