Mis-sold Mortgage Claims > Mortgage News
New Reforms will Mean Tougher Mortgage Lending Criteria Due to Mis Sold Mortgages Scandals
Mon, 20 Feb 2012
A recent FSA report tried to deal with the problem of people defaulting, by overstretching themselves financially or being subject to mis-sold mortgages.

The FSA has said that "bad lending" has nearly disappeared, as a result of lenders tightening their criteria in adverse economic conditions as opposed to homebuyers voluntarily trying to curb borrowing habits.

Therefore, the FSA has suggested three new rules to update existing mortgage lending criteria, which are to take effect in 2013.

The first new rule states that an affordability assessment will be needed to verify the income of mortgage applicants.

The second new rule is that fixed and variable essential household bills, like council tax and child maintenance, have to be accounted for.

The third rule stipulates that the lender has to consider how future increases in interest rates may impact upon the borrower's ability to make mortgage repayments, and adjust the loan amount requested accordingly.
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