37% feel less in control of their mortgages

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10 Jun 2015

37% feel less in control of their mortgages because of MMR

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One year on since the introduction of the Mortgage Market Review (MMR) more than a quarter of people say it has made them feel less in control of securing the mortgage they need, according to a report commissioned by Experian in April 2015.

In April 2014, the same report was conducted and at this time 43% of aspiring homebuyers believed that MMR meant they could apply for mortgages with smaller deposits, worryingly 23% still believe this is the case.

In fact, 14% say they were unable to buy because their deposit was too small, and this isn’t just first-time buyers; the report revealed that 19% of the buyers struggling to raise a big enough deposit one year on from MMR were aged 34-44.

Greg MayWith the average cost of a home rising to £170,000, the average age of the first time buyer has naturally been driven up to 30.

“Homebuyers need to get their finances in the best shape possible to stand the best chance of securing the mortgage they need, whether they’re first time buyers or not” comments Greg May, Director of Romans Mortgage Services.

“Unfortunately, many are not fully aware of the impact of MMR, and they are not preparing properly when it comes to making a mortgage application.”

The Experian report also revealed that only 8% of potential buyers have checked their credit report in the past six months.

“The new reforms were put in place to double check borrowers can definitely afford the mortgage repayments, based on their specific incomings and outgoings. Therefore, with the right preparation and advice they shouldn’t cause you any problems” adds Greg.

The European Mortgage Credit Directive

MMR isn’t the only thing buyers need to be aware of; from March 2016, as part of EU legislation, the UK is required to implement the European Mortgage Credit Directive (ECD).  Currently only one in five understands the impact this will have on them, according to the Experian report.

The rules that the ECD will introduce will affect those considering buying property abroad; who receive their salary in a foreign currency; and those who look to re-mortgage with a different lender.

What is MMR?

On 26th April the Mortgage Market Review (MMR) reforms came into effect. The change will help to deliver a mortgage market that works better for consumers and is sustainable for all participants; basically it ensures people take out a mortgage they can afford.

The reforms involve lenders conducting thorough screening processes to double check borrowers can definitely afford the mortgage repayments, based on their specific incomings and outgoings.

Romans Mortgage Services advisers have years of experience in assessing the marketplace and use their expertise to choose the most suitable lender for each customer which means it's much more likely that their application will be successful the first time.

To find out more and book an appointment with a local adviser phone 0118 3219 536 or visit: romans.co.uk/mortgages.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

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