| The Two Factors That Affect Mortgage Advice In UK Market |
| Articles - Mortgage |
|
The mortgage market regarding mortgage advice Uk and mortgage applications has changed dramatically from the pre-crunch days. Mortgage brokers and lenders need to look at two main factors that affect lending for all banks and building societies and that is affordability and creditworthiness.
The mortgage market regarding mortgage advice Uk and mortgage applications has changed dramatically from the pre-crunch days. Mortgage brokers and lenders need to look at two main factors that affect lending for all banks and building societies and that is affordability and creditworthiness. Gone are the days of subprime mortgages, self certification, and mortgages available up to 95% loan to value. Lenders and the regulator are both far more cautious and the new idea now for mortgage advice UK is creditworthiness and affordability. Let us look at creditworthiness and what this means and the impact on mortgage advice UK market Let us look at creditworthiness, it is defined as having an acceptable credit rating which means that you have never missed an payments on your credit committments, you have never had a county court judgement and you have never declared yourself bankrupt. If any of the following refers to you then you are classed as not creditworthy. If you are not considered creditworthiness then you need to understand how creditworthiness is assessed. Creditworthiness is assessed on credit scoring which means you get points for how long you have lived at your address, you also get points for how long you have been with your employers, how long you have been with your bank or building society and many other factors. If you are considered creditworthiness they you will not struggle to gain a mortgage. However, many banks and building societies have increased their credit scoring criteria as a way to control the number of applications that come to them, in turn leading to a situation where people with good credit scoring are being declined not because they have imperfect credit records but because the lenders do not want an influx of business they cannot process. Once creditworthiness is achieved then you need to move on to the next battle which is affordability which means that pre crunch days lenders would use income multiples to work out how much you could borrow, this kind of affordablity has now been abandoned and the system banks and building societies now use it they work out your disposable income which is income minus expenditure to give you what is left and this is known as disposable income. However, every banks and building society affordablity is assessed differently. Therefore we operate in a mortgage market where there is a lot of demand than supply of mortgage funding and as long as this situations persists banks and building societies will be selective on whom they wish to accept. We will may never go back to pre crunch days but you need to bear in mind so achieve the mortgage you want you need to mindful of the two key factors creditworthiness and affordablity. So it is paramount to seek mortgage advice in the UK. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Looking for Mortgage Advice UK. Let Mortgage Solutions the specialist in Mortgage Brokers London and what it can do for you. |