Press Room
Fsa Introduces Common Sense Mortgage Proposals
The Financial Services Authority (FSA) has drawn up plans to improve responsible mortgage lending, taking into greater account the amount consumers can afford to pay.
Under the new regulations, mortgages must only be offered if it is believed the borrower can pay without relying on future rises in the price of property for sale.
Lending also must not be offered on the assumption that interest rates will remain low and the affordability assessment must include the potential for rates to increase.
These new principles will bring about key changes in the approvals process, including the need for income to be verified on every application, greater consideration of outgoings and the consideration of market expectations for interest rates.
Chairman of the FSA Lord Turner said the body sees the plans put forward as being "common sense".
In response, Council of Mortgage Lenders director general Paul Smee said: "Rules need to be practical and avoid unintended consequences. Whilst there is much detail to be pored over, the FSA's new proposals seem to strike broadly the right balance."
Start searching for your new home on email4property today.
-- Ends --
Notes for Editors:
Article date: 12/19/2011 12:00:00 AM