As we pointed out on 21 January, those wanting a mortgage will be subjected additional financial scrutiny under the new “affordability tests” imposed by the Financial Conduct Authority which come into force at the end of this week called the Mortgage Market Review. Many lenders have already been slowly introducing the procedure since our first article.
Under the new regime, lenders will carry out a thorough “forensic” investigation of a borrower’s finances. An initial mortgage assessment at a branch could last as long as two hours according to Halifax and Santander. Lenders will want to know more details about borrower’s day to day finances, including, how much they earn, spending on food and utility bills every month, gym membership, mobile phone contracts and the size of any existing debts.