April is upon us and for those of us working in the mortgage industry we already know this means some big changes are on the horizon. However, many homebuyers aren’t aware of the implications of what lies ahead. If you have been thinking of getting onto the property ladder or already own a home but want to take advantage of the boost in home values in recent months by refinancing, then now is the time to familiarise yourself with the expected changes in the market.
What is the Mortgage Market Review?
The Mortgage Market Review (MMR), which is coming in on the 26th of April, is being introduced to give consumers a greater degree of financial protection, so although this can only be seen as a positive step, in reality what it means is that once the new rules come into play, there will be a lot more hoops to jump through in order to get your application approved.
The primary focus is that all mortgages will be sold on an advised basis only (limited exceptions available), so all clients wanting to get a mortgage will have to go through an extensive initial consultation with a sales adviser, where their financial situation (down to groceries and childcare costs) will be examined. Experts have said that this could take as long as 2 hours to conduct so it is important to make sure you are prepared in advance. Lenders will also require a large number of documents to support the application, so if you haven’t already, make sure you start saving all payslips, bank statements and other important financial papers that may be relevant to proving your ability to repay the loan.
Going direct could be a bad move
Fortunately, we at Springtide Capital have been geared up for these changes for a long time past. However, according to the FCA the same cannot be said for many of the lenders. The reforms are likely to impact lenders the most whilst they adapt to increased paperwork and the requirement to review existing processes and systems. Post MMR, lenders will rely much more heavily on their key broker partners to keep business flowing smoothly. What this means for homebuyers is that going direct to a high street lender rather than getting help from an adviser after April 26th is now far more likely to result in delays and problems with your mortgage application further down the line.
In this time of change, relationships are more important than ever. We have long established connections with hundreds of lenders and are poised to help you through what is set to be a challenging time for everyone involved. The MMR will show up the brokers that cut corners and will showcase the ones that continue to provide outstanding quality of service.