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Mortgage applicants face tougher questions about their lifestyle, under new rules that take effect on Saturday. The changes are designed to "hardwire common sense" into the mortgage application process, the Financial Conduct Authority (FCA) said. Questions from lenders about customers' regular outgoings - including childcare costs and even haircuts - could be included in affordability checks. Brokers say the changes could lead to delays and rejections of applications. The Council of Mortgage Lenders (CML) said the transition to the new rules would be smooth, despite it being the biggest change to the mortgage market for more than a decade. And many lenders have already changed their systems so they comply with the new rules.
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The rules - known as the Mortgage Market Review (MMR) - are designed to protect consumers from the kind of reckless mortgage lending that would leave them unable to make repayments. They were drawn up during the financial crisis and originally planned to come into force last summer but changes were made following consultation with lenders.....Read more here
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Bizarre questions in new home loan crackdown
Mortgage applicants are being asked astonishingly intrusive questions including whether they play golf or eat steak, it emerged last night. They are being quizzed over the price of their haircuts, their plans for more children and their hopes of a pay rise. Lasting up to three hours, the questions are supposed to prevent a return to the reckless lending behind the financial meltdown of 2008. Latest figures show the full impact of what has been dubbed a ‘Spanish inquisition’ with loan advances being slashed even as house prices rise......Read more here