As the Mortgage Market Review D-Day of 26th April rapidly approaches, there has been a swell of demand for fixed rates in a mortgage market bracing itself for the stormy winds of change.
As lenders become increasingly busy and the stresses on their administrative teams becomes far greater, the natural response is likely to be an increase in mortgage rates, to try and stem the flow of applications, and return service levels to normal, for those lenders worst-affected.
It is a common tactic employed by mortgage lenders, who at certain times will try and actively encourage borrowers to go elsewhere. This could be for various reasons, such as a tranche of funds running low on a particular deal, but it’s likely to be for a very different reason this time.
As the mortgage market is currently at its busiest since the credit crunch began, and lending levels are at their highest since a pre-crunch high, the drastic changes due to take effect this month will undoubtedly cause processing delays to many applications.
“Believe it or not, it isn’t unusual for lenders to, at times, steer customers away from their products” says Taj Kang, Business Development Director at Contractor Mortgages Made Easy.
“It’s quite common amongst certain types of lending, for example the higher-risk lending that is offered on occasion by building societies, who have a duty to their members to ensure that business is ‘good business’.”
“It’s probably fair to say however that this is the first time that this has happened for a reason like this. MMR brings with it some monumental changes in the mortgage market, with even the biggest lenders bracing themselves for a turbulent quarter.”
It’s not all cause for concern though, says Taj, as there are still ways to safeguard against this – particularly for Contractors.
“The saving grace is still the fact that many lenders are not adopting their new, MMR compliant lending criteria until mid-April, meaning that there is still a small window to act.”
“By leaving mortgage enquiries until next month, not only will it be incredibly time-consuming and potentially problematic to try and arrange further borrowing directly with a bank, but you risk a higher interest rate – or missing out altogether if you’re caught out by changing criteria.”
“By speaking with a specialist broker now, you can ensure that any pre-underwriting is concluded on existing criteria, which will put you ahead of the queue come 26th April. Luckily, with the extensive pre-underwriting that we carry out at Contractor Mortgages Made Easy, we are already assessing each case in the most extensive way, and so you may well notice no difference.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080