April 2014 saw the Financial Conduct Authority conduct a Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review (MMR), to ensure that firms were lending transparently and responsibly.
An enhanced focus, particularly on the affordability side of the process, has seen borrowers being refused the amount that they require, and over 40s being told they must choose a shorter term for their mortgage to make sure it ends prior to their retirement.
The MMR has meant that additional legislation has been brought in, which means that a borrower’s income and expenditure is looked at in a lot more detail.
David Hollingworth is a mortgage expert working for broker London & Country, and says that while there should not a bigger problem in the wake of the MMR for over 40s to obtain a mortgage; rather, the issue lies in the fact that more restrictions will be imposed on the term, to ensure that the mortgage is repaid by the state retirement age of 65.
If a borrower specifically requested a mortgage term that would take them post retirement, it would mean further questions from the lender, including proof as to how they would be able to maintain the payments once they retire.
Some lenders also now have a maximum age limit for the point to which a mortgage can run, ranging from 65-75. It is your job as a mortgage professional, once accredited after your CeMAP training, to ensure that your customers fully understand the mortgage process, the regulations that need to be complied with, and how it all affects them as borrowers.
