
Tenants demand changes to lending processes
November 3, 2017 by Brendan
Borrowers
Tenants have recently called for lenders take the history of rental payments into account when assessing the mortgage applicant’s ability to afford and repay the loan.
Some housing market experts are blaming the regulations for some first-time buyers not being able to secure a reasonably sized mortgage. One tenant has taken action, and launched a petition for the regulations to be changed. The tenant was experiencing difficulty getting a mortgage, despite having paid around £70,000 rent over the years. He claimed that it was unfair that lenders didn’t take the rental payments into account when assessing him for a mortgage. The petition garnered around 150,000 signatures.
MPs recently considered and discussed the proposals, and an official response was provided. The official response stated that lenders would be able to take previous rental payments into account, but this could only be one factor in the process. The Government also made it clear that they would not interfere in the process, as it was a commercial decision made by lenders. However, mortgage experts feel that regulations are to blame for not taking rent into account.
Ray Boulger, who is an advisor at John Charcol, the mortgage brokers, said that although regular payments of rent would improve the credit rating of a mortgage applicant, and indicate reliability, it would not allow a lender to offer a larger loan.
Mortgage advisors invest a considerable amount of time into CeMAP training, which helps first-time buyers to find the most suitable deal for them.
Written by
Brendan
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