Lenders will become less prescriptive about the depth of affordability questioning once the mortgage market review “beds in”, with processing delays only temporary, the FCA has said.
An FCA spokesman said that, seeing as the regulator has “not suggested that lenders should be required to consider all items” of customer expenditure, it expects that lenders “will become less prescriptive once the MMR beds in”.
The comments followed widespread reports that lenders are asking increasingly detailed questions about borrowers’ spending habits following MMR implementation on 26 April.
A client newsletter posted by Cornwall-based IFA firm Worldwide Financial Planning on Monday this week reported that one applicant used his debit card to bet on the recent Grand National and was then “quizzed as to whether he had a gambling habit”.
It also claimed there will be a “considerable delay” in getting approval for a mortgage in the coming months.
However the FCA spokesman said delays causing mortgage interviews to take several hours should be “temporary”.
The spokesman said: “Taking out a mortgage is one of the biggest financial decisions a person can undertake and it is sensible that the advice process takes a bit of time in order to ensure that the customer gets the right product for their needs.
“We believe that the lengthier process may only be temporary while firms bed in new systems and processes.”
Ronan Marrion, independent mortgage specialist for Cornwall-based Worldwide Financial Planning, said: “I think MMR is more about anticipating future expenditure. Although it is getting a lot of publicity about it getting harder to get a mortgage, I don’t think it’s that much more difficult than six weeks ago or a year ago.
“There are not that many lenders who’ll go through expenditure with a fine tooth comb although some of the smaller building societies are asking more detailed questions.”
