The new mortgage market review - it will stifle lending, don't you think?

[SamanthaJones]

My friend has just been turned down for an extra £25k on his mortgage because of the MMR. He had a 3 hour phone interview and he and his wife are really hacked off.

He applied with his own bank, has no debts other than a mortgage, never goes overdrawn, earns £80k (but is working as a contractor - this might be the bit they didn't like) and has a loan to value of 50%

There's very little risk to the bank and if he had applied before MMR he'd almost certainly have got it. But the computer said no.

There was a good article on this recently, I'll link to it if I can find it. It wasn't responsible borrowers who created the financial crisis but they're the ones being penalised now.

I'm just glad we remortgaged last year and don't need to go through this for a while.

Don't the banks realise that even if you're in a permanent job you could be made redundant tomorrow?

www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10793123/Mortgage-clampdown-is-too-late-and-too-harsh.html

We just remortgaged with a whole heap of debt, low ish earnings and an 80% LTV with no problems whatsoever so I wonder if there's something else going on with your friend

I might tell him to check his credit file, good idea.

Difference is additional borrowing vs contract variation which can include remortgage. affordability check would not be waived for AB where as it can be for CV although many lenders won't. Each lender will have interpreted the rules slightly differently so there will be reports of inconsistencies.

They weren't told why, no.

That's interesting bear

It'll be the contractor status they don't like. Lenders never have been comfortable around borrowers that are self-employed, on non-permanent contracts or who have a high proportion of allowances/overtime making up their monthly take-home rather than straight salary.

If he's a contractor he is either

• self employed : in which case they will need 3 years worth of tax returns (no ifs no buts)
• a director of his own Ltd Co : which may well have managed its tax affairs rather well so his tax return earnings will not add up to where he needs to be

its tough out there

Coupled with rate rises hopefully it will cool this ridiculous market Already seeing it acc to my solicitor who only does property and I am in the SE

You can have dependants but no child care costs.

www.bbc.co.uk/news/business-27599787

I just wish the Land registry would publish the full set, rather than their arbitrarily edited selection

Not by a long way
www.landregistry.gov.uk/market-trend-data/house-price-data-exclusions
Up to 10% of transfers of ownership of houses are excluded

If he's a contractor they should go to a broker that specialises in mortgages for contractors. They will know the best lenders to go to as going directly to banks will probably result in being refused. We managed to get a mortgage through Halifax with 1 years accounts and a 10% deposit by using a broker but that was a few weeks before the changes may be harder now.

Scotmum
That sort of deal is exactly what the rules were brought in to stop.

I've had clients demand "estimated" incomes in the past
now its the HMRC or take a hike.