Following the global financial Crisis The Financial Services Authority (FSA) announced that they would conduct review of the mortgage market. In-house Independent Financial Advisor, Andrew Fagg of Davenport Financial Management gives a brief overview of the Mortgage Market Review…
The Mortgage Market Review (MMR) set out the case for reforming the mortgage market to ensure it is sustainable and works better for consumers.
It had become clear by the height of the market in 2007, that, while the mortgage market had worked well for many people, it had been a cause of severe hardship for others. The regulatory framework in place at the time had proved to be ineffective in constraining particularly high-risk lending and borrowing. The Mortgage Market Review package of reforms is aimed at ensuring the continued access to mortgages for the great majority of customers who can afford it, while preventing a return to the poor practices that we saw in the past.
The majority of the Mortgage Market Review changes come into effect on 26 April 2014. Those that will be most relevant are:
- Most interactive sales (e.g. face to face or telephone) to be advice based.
- Every mortgage adviser will be required to hold a relevant mortgage qualification.
- Lenders will be fully responsible for assessing whether the customer can afford the loan, and they will have to verify the customer’s income. They can still choose to use intermediaries in this process, but lenders will remain responsible.
Further evidence of affordability will be required following Mortgage Market Review taking into account outgoings such as Company Pension Contributions, Student Loan Payments taken from salary at source. These changes are designed to ensure that consumers are less likely to be placed a position that exposes them to financial hardship in the future.
Many Intermediaries have been working along these lines for a number of years already so the changes should not have a major impact on the way their customers are advised.
For further information and to discuss your mortgage options, please contact Andrew Fagg on 07720 353866 or email email@example.com.Visit the Mortgages page where the latest offers are regularly updated. Click here for full information fron the FCA.
Davenport Financial Management Limited is authorised and regulated by the Financial Conduct Authority. Davenport Financial Management Limited is registered in England No: 05608901. Registered office: Sherwood House, 41 Queens Road, Farnborough, GU14 6JP, Telephone 01483 427366. Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.