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New FCA mortgage rules lead to long queues

by Sable International | Jun 17, 2014
  • The Financial Conduct Authority (FCA) recently released their latest Mortgage Market Review, a new set of regulations that focus on responsible lending.
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    The aim of this new rule set is to shift loan responsibility onto the lenders themselves. In practice, this will result in a new set of stringent checks by lenders in an attempt to limit any risk to themselves.

    For some, this ruling is long overdue and the FCA should be praised for putting its foot down; but these changes have also resulted in huge backlogs with high street money lenders. Many reports of long waits for interview slots have begun to filter down from those applying for their mortgages, and some banks are taking up to three hours to interview prospective clients. 

    So what can I expect in the interview?

    The answer varies from bank to bank. Proof of salary has to be shown when applying for a mortgage, and the FCA makes lenders take responsibility for ensuring that their customers can afford the loans they give out. Each bank will need to decide the appropriate level of enquiry. This seems to range from submitting three months’ worth of bank statements with your P60 to a detailed interrogation of your spending habits and plans to procreate. 

    How long do I have to wait for an appointment?

    There is no definite time, but it could take weeks to get an appointment depending on which branch you apply at.  Add to that the fact that some lenders are already reporting delays of up to six weeks for loan approval, and you could face the very real possibility of losing out on your dream home or property.

    The solution? 

    With all these policy changes, borrowers are being subjected to increasingly rigorous testing for mortgage affordability. More than ever, you need someone to fight in your corner. This is where a mortgage broker is essential; someone who can help you get the best deal for your situation.

    The key difference between using a qualified broker and applying directly through a bank is that bank staff aren’t really in a position to offer advice. They ask you a series of questions and, if your circumstances don’t fit their mortgage packages, it’s tough luck. 

    It’s also worth mentioning that your interview will more than likely be conducted by a relatively junior member of staff, whose lack of experience may result in the approval of an application that will be denied two to three weeks later by a senior underwriter. In today’s property market, a wait of six weeks followed by a rejected application doesn’t really leave much room for a plan B.

    A mortgage broker can assess your information and offer sound advice around the best mortgage products available across a full spectrum of lenders. You will still have to provide these lenders with the documents they require, but a broker will make sure that you have your facts straight and will deal with the bank in your stead. 

    Sable Mortgages is recognised as one of the UK’s leading foreign national and contractor mortgage specialists. We have been helping both non-residents and self-employed contractors obtain a competitive mortgage since 2006. We offer sound, impartial advice that will help you get the right mortgage. More than anything else, we make the complex feel simple. 

    If you would like to speak to a consultant, please email us at mortgages@sableinternational.com, or give us a call on +44 20 7759 7519.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

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