New regulations are to come into force next year, creating concerns for mortgage advisers who believe that lending criteria could become even stricter.

The Mortgage Credit Directive will be introduced in March 2016, although some changes have already taken place due to the introduction of the UK Mortgage Review. The EU Mortgage Credit Directive is being introduced to ensure consistency throughout Europe and to make sure that consumers can afford the products they are being offered. One of the changes is the removal of the Key Facts Illustration document, which will be replaced with the European Standard Information Sheet. According to research undertaken by the Intermediary Mortgage Lenders Association, 70 per cent of advisers don’t believe that introducing a second APR will be beneficial to the mortgage market in the UK. The recent Intermediary Lending Outlook study also states that 68 per cent of brokers interviewed don’t think the changes to the Key facts page will be beneficial.

According to the executive director of IMLA, Peter Williams, the mortgage industry has just started to cope with the recent changes introduced by the Mortgage Review. The new EU changes will cause even more problems. Although experts consider the affordability checks to be a sensible option for lenders, the rules are too rigid and some people are being refused a cheaper deal, even when not increasing the amount borrowed.

Borrowers who are hoping to get a new mortgage or to increase borrowing, may require experienced help from a CeMAP trained adviser.

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