"The Mortgage Market Review came into force on 26th April 2014 with the clear aim of eliminating risky lending (and borrowing). A massive hoo-hah as usual but the principal changes are reasonable and are simply meant to ensure that:
• Borrowers can afford to repay their loan
• Borrowers must provide evidence of income to support their loan
• Borrowers generally will need to be advised on what they should borrow rather than simply borrow what they want
• Lenders are now fully responsible for assessing that the borrower can afford their loan, including a stress test that assesses the impact on the borrower’s ability to pay should interest rates rise, and looking more deeply into the borrowers lifestyle spending habits (socialising, gambling, spending on personal care) to ensure that they have taken all expenditure into account
So basically, mortgage advisers must be professional experts in their field and help to ensure that the borrower is not over-extending themselves – all pretty sensible really, so that's good then."
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