Are you over 45? Self-employed? Divorced and remortgaging late in life? Got your eye on a great ex-council house? Or like the look of that cheap studio flat? If you are in any of these groups, you are likely to be among the growing number of “mortgage misfits” who struggle to find a lender willing to offer a loan.
Tough restrictions imposed by the City regulator to ensure borrowers can really afford a mortgage – and wariness about lending on certain types of properties – mean that many applicants are being turned down.
Eight out of 10 mortgage brokers say they have had to reject customers in the past six months, according to figures from the Intermediary Mortgage Lending Association. Brokers cite interest rate stress tests and tougher evidence of income and spending required by lenders as the reasons why many applicants fail.
The rules were put in place in April 2014 for a good reason: to prevent a repeat of the dodgy lending practices common before the financial crisis. But critics argue that a “computer says no” approach is denying perfectly good applicants a loan.
You are over 40
The majority of lenders will only grant a mortgage to your planned retirement date. So if you are aged 45 and expect to retire at 67, the maximum mortgage term might be just 22 years.
Adrian Anderson, director of mortgage broker Anderson Harris, says: “The ageist attitude being taken by lenders is a result of their interpretation of the MMR [mortgage market review] guidelines. Given that the average age of a first-time buyer is now 37, it is all rather worrying as it doesn’t leave much time to get a mortgage paid off before retirement.”
read more: http://www.theguardian.com/money/2015/mar/14/mortgage-misfit-borrowers-lenders-criteria
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