The Times - Do you know how to secure a mortgage? January 2014

by Aaron Strutt

Jan 31 2014

Taking out a mortgage could become more difficult this year as the changes imposed by the Mortgage Market Review (MMR) come into effect. The MMR " which will officially be implemented in April " is a new set of rules designed by the Financial Conduct Authority to prevent excessive or risky lending and to protect the consumer.

Will the MMR make lenders more efficient? Yes and no. "Mortgage lenders will have to take more responsibility to ensure borrowers can afford the mortgage and this is likely to make approving a mortgage more time-consuming", says Aaron Strutt, of the Trinity Financial a broker.

Nationwide says it expects to offer as many mortgages after the changes as before. Strutt goes onto say that one lender is tapping into Revenue & Customs: "Its system links with theirs and verifies the salary or accounts that the taxman has on the applicant. This speeds up the underwriting process and reduces fraudulent applications."

Will it be harder for me if I am a first-time buyer? The higher LTV you want, the better your credit score should be. The average first-time buyer now has approximately 20 per cent as a deposit, according to Aaron Strutt " and there are some great rates at that level, such as the Post Office's two-year fixed rate at 3.48 per cent, at 90 per cent LTV. " Generally speaking, the smaller deposit you have, the higher your credit score needs to be.

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January 31, 2014