A brokers perspective...MMR

Eviesmummy

makeitstop wrote: »

But surely that's always been the case with mortgages at the end of any fixed period.?

If any of us knew for certain what interest rates would be in two, three or any specific number of years into the future, we could make a fortune.

True, but my worry is more to do with the fact that I just managed to get my application in before the MMR rules came into effect, so I wasn't subjected to the new affordability rules. In reality, assuming that nothing horrendous happens unexpectedly, I plan to over pay for the next two years not only to cushion against future rate rises (If I've been paying more than I need to now and rates go up I'll more than likely still be overpaying - although at a lower percentage - at the new rate, so wont notice a change in my payments) but also to make the best use of the low rate that I've managed to secure and reduce LTV by an extra £5,000 for when it comes time to look for a new deal. So I'm probably stressing unnesecarily, but I like to try and plan ahead as far as I can when it comes to finances, for the sake of my sanity I need to know that all my ducks are in a row.:)

ACG

It will vary from lender to lender, but typically you are looking at around 6-7.5% depending on lender and whether you are using HTB or not.

Some may be less, some may be more.

Jennie2827

Have you tried going to different lenders intermediary sites and looking at the affordability calculations there? Each one does slightly vary, but by plugging in a few numbers, one can easily work out their system. . It's far better than the calculators on the lenders public sites. .

Caladan

makeitstop wrote: »

Can you explain why it is that some lenders do not allow brokers access to their mortgage products, and, if that remains the case, what potential borrowers should do to ensure the best deals available for their circumstances.?

All kinds of reasons. It's cheaper for the lender if they don't have to pay a broker. Some prefer to do their Anti Money-Laundering/Know Your Customer checks in-house and some prefer to meet prospective clients face to face so they can cross sell other products to them.

Actually, reading what I just wrote, the majority of lenders who take this approach probably do it for all 3 reasons!

I'm very interested to see how MMR affects peoples approach to Mortgages. Personally, if I wanted advice I would probably go to a broker unless I knew there was a particular deal on the market I was after. It might be a bit more expensive (edit: or the Broker might find a product better suited or cheaper, could work either way) but I'm the type that prefers to pay a bit more to avoid the legwork .

Still, if you do want advice (and 'interactive' sales (read - Over the phone or face to face) are now required to be advised across the board I believe) and you're in a rush to get the ball rolling then what's wrong with spending 3 hours on the phone? It's probably quicker than driving to the bank, parking up and waiting for your complimentary cup of Nescaf! in the long run.

*Tea*lady*

How accurate do you need to be about these figures? If I'm honest I account for my income and outgoings but knowing how much I spend on entertainment or household I would only be able to give a rough estimate, there being the worry of under or over estimating?!

lovedayuk

They will be examining up to the last 3 months bank statements, so basically anyone looking to change their mortgage if smart enough will stop spending on takeaways, entertainments, gym memberships etc 3 months running up to looking for a mortgage.

ACG

lovedayuk wrote: »

They will be examining up to the last 3 months bank statements

Potentially beyond if you apply to who you bank with.

*Tea*lady*

Do they differentiate between things you are tied in a contract to such as a gym membership and things you could cut back on to save money which aren't a commitment? Like cutting down on cinema and leisure etc

wrkactjob

Will all this MMR information be given/sold to Experian who will retain it to make future decisions on lending affordability?

It would be useful for them to have it so they can help make more accurate and responsible lending decisions in the future and help the public not to get into a debt situation which they can not afford to be in.

Will the MMR become a blueprint for all future lending decisions?

loveka

I've just read all this and I am a bit worried now, as I didn't know this applied to remortgages with a current lender!

So, when my fixed deal runs out I will have to go through this with my current lender? I think we wouldn't get a new fix with these criteria, as we only have one income now and although we can easily afford what we currently pay, at, say, 7% on paper we ouldn't be able to. So would we then be put on the SVR? Which would be less affordable for us?

At this point we would only have 5 years left on our mortgage. So in effect these new rules will mean we will pay loads more in interest for those 5 years?

Is this the case? If so, it seems like madness to me...