According to new research, almost one third of people who are planning to buy a property in the near future are unaware that new regulations had been introduced governing mortgages.
The study, which had been conducted by Ocean Finance, a mortgage broker and lender, also revealed that a further third of people who did know that the regulations had been introduced, were still confused about the rules.
The Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Review, produced by the Financial Conduct Authority, was introduced in April 2014. The regulations have been designed to make sure that lenders only provide loans to suit a person’s affordability. As a result, borrowers will face more questions about their income and their expenditure, with details of spending on holidays, childcare and entertainment being taken into account. The survey revealed that 70 per cent of people buying a home had no idea that lenders would look so closely at their income and expenditure, and as a result 25 per cent hadn’t modified their spending habits in preparation.
Less than a quarter of the respondents knew that they would be tested to see if they could afford the repayments on a mortgage if the interest rates increase. Only 16 per cent realised that the regulations mean that a person’s ability to repay their mortgage if their circumstances changed would also be looked at.
Preparation before applying for a mortgage is crucial following the introduction of new regulations, along with the advice of a professional adviser who has CeMAP Training.