Lenders have been encouraged to think about the impact on homeowners of raised borrowing costs, and how an increase in interest rates could affect them and their ability to maintain their mortgage repayments.
The Council of Mortgage Lenders (CML) has revealed that the extended period of lowered interest rates has led to a pattern of declining arrears with mortgages as well as repossessions.
Speculation as to the timing of any potential rate increase keeps changing, leaving an element of uncertainty. The CML said:
“If a rise does not come until later in 2015, as many commentators now expect, we would urge against complacency and encourage borrowers to plan ahead for higher borrowing costs.”
A spokesperson explained how the organisation feels that most borrowers have thought about a rate increase, and have plans in place. While this means the number of those who face difficulty should be minimal, it reiterates to lenders the importance of ensuring borrowers are prepared and have planned ahead.
Having gained accreditation following completion of your CeMAP training, you will be best placed to advise, guide and support your customers. In order to comply with the regulation laid out by the Financial Conduct Authority, you will carry out full and effective affordability checks on your customers’ income and expenditure. When calculating how much they can borrow, the scoring system will factor in their ability to repay in the event of a rate increase, which you can discuss in more detail as part of the interview.