Mortgage Market Review (MMR)
Getting a Mortgage has got tougher! Here at HomeBuyingMadeSimple we help you lay strong home-buying foundations - before you ever apply for a mortgage, giving you the best chance of success.
The MMR is a very comprehensive review of the mortgage market, which began with a Discussion Paper in 2009 and culminated in a Policy Statement and final rules in October 2012.
What it means...
Lenders are fully responsible for assessing whether a customer can afford the loan in question, and the lender has to verify the customer's income. They can still choose to use intermediaries/advisors in this process, but lenders remain responsible.
The lenders can still grant interest-only loans, but only where there is a realistic and credible strategy for repaying the amount borrowed
There are some transitional provisions in the MMR that will allow lenders to provide a new mortgage or particular deal to customers with existing loans who may not meet the new MMR requirements for the loan. The borrowing cannot exceed the amount of their current loan, unless funding is required for absolutely essential repairs. The decision on whether or not to lend in these cases remains with the lender.