Mortgage market reformer denied mortgage

liviboy wrote: »

Good! As she states in the article, it's not the rules themselves that caused the issue but rather the lenders' interpretation of the rules...and who can blame them for erring on the side of caution given there were threats of big fines for "irresponsible lending".

This is what happens when regulators interfere in ways which affect the normal customer unjustifiably...

"stress testing" borrowers to interest rates of 10-15% when the current base rate is 0.5%...and not taking into account that LTV will most likely reduce as mortgage payments are made...

Im not sure where you got that from. They are typically stressed at closer to 8% - FPC recommendations
In June 2014, the FPC made the following recommendations to the PRA and FCA:

Interest rate stress test
!!!8216;When assessing affordability, mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, Bank Rate were to be 3 percentage points higher than the prevailing rate at origination. https://www.fca.org.uk/firms/interest-rate-stress-test

Removing entirely from the calculation a credit card balance of a couple of thousand pounds when it would be cleared within 12 months...yet that £2,000 is removed, in its entirety, from a customer's income for affordability and lending calculations rather than as a one-off sum... so that £2,000 is multiplied by 25 or 30 years....

This is also incorrect. Some lenders will ignore debts with less than 6 or 12 months left to run. With some lenders having £2000 on a credit card will not even affect the amount that can be borrowed.

MMR rules have made mortgages much harder for normal working folk who can otherwise afford current mortgage payments or indeed rent payments without any issue...

It has become more difficult to get a Mortgage for certain people because it was too easy. Self cert mortgages, interest only for people who can not afford repayment, 7-8x income - all of these things where it was dangerous to the customer have been targeted. I think that is a good thing. It is easier to get a Mortgage now that it was 5 years ago when I started out as a broker. The difference is how much you can get and who can get them.

The normal working person should have no issue getting a mortgage.

kingstreet wrote: »

Typically, lenders take 3% or 5% of the balance as the cost of the commitment, so £60 to £100 a month. This would impact affordability but not as much as you seem to think.

Trial different lender calculators with and without that balance and see the difference in outputs.

To give an example. My current lender, with a £2000 credit card balance max prepared to lend was £188,000...without that credit card it was £231,000...that’s a helluva difference!

Naturally I simply cleared the 0% balance.

I know everyone’s circumstances are different but the only change I made was to the credit card balance on completion.

I find it hard to believe a lender would alter their lending amount by £40,000 on a £2,000 balance.

Are you sure you filled out the affordability calculator correctly?

Thrugelmir wrote: »

That's a commercial decision for her existing lender. The fact she previously worked at the FCA has no relevance.

But got to admit the irony there though

liviboy wrote: »

Good! As she states in the article, it's not the rules themselves that caused the issue but rather the lenders' interpretation of the rules...and who can blame them for erring on the side of caution given there were threats of big fines for "irresponsible lending".

This is what happens when regulators interfere in ways which affect the normal customer unjustifiably...

"stress testing" borrowers to interest rates of 10-15% when the current base rate is 0.5%...and not taking into account that LTV will most likely reduce as mortgage payments are made...

Removing entirely from the calculation a credit card balance of a couple of thousand pounds when it would be cleared within 12 months...yet that £2,000 is removed, in its entirety, from a customer's income for affordability and lending calculations rather than as a one-off sum... so that £2,000 is multiplied by 25 or 30 years....

MMR rules have made mortgages much harder for normal working folk who can otherwise afford current mortgage payments or indeed rent payments without any issue...

It's annoying and perhaps getting a taste of her own medicine will make her reflect when she is "consulting"...

Most of the above needs ignoring due to it being complete twaddle.