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What will the new mortgage rules mean?

Since last Saturday, new rules have come into effect as part of the Mortgage Market Review (MMR). The FCA claimed that are designed to “hardwire common sense” into the process which people go through when applying for a mortgage. The rules include asking applicants about their expenditure, and are aimed to ensure that borrowers do not take on loans bigger than what they can afford.

This should be a promising step. For those of you who know ASC Finance, it wouldn’t come as such a surprise to you that we support moves which add common sense into the market. We believe that it’s better to ensure that people have straight forward communication and get the right finance, rather than being provided with a mortgage which doesn’t fit their requirements.

However, we hope that this doesn’t just become a barrier to finance. If customers are just faced with even longer online forms and speaking through call centres, having to recall exactly how much money they spent on each haircut, shopping trip and every itemised bill, then it will just make it harder to access finance. Of course, affordability should be a key part of any mortgage discussion, but it should be part of a discussion about getting the right finance, not just a form filling exercise.

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