The Mortgage Market Review (or MMR) was a comprehensive investigation of the mortgage market conducted by HM Government after the 2008 Credit Crunch and subsequent worldwide financial crash. It was proposed in 2009 and came into force in 2014.
The changes implemented as a result are directly because of its findings, which concluded that there were too many instances of high-risk lending prior to the 2008 financial crisis. This meant many people were unable to afford their mortgage repayments and further exacerbated the resultant crash. As a result, the mortgage world has toughened up. No more self-certified mortgages (or ‘liar loans’), fewer interest-only mortgages and the requirement for mandatory advice on all mortgage products.
Part of the review requires lenders to implement a financial ‘stress test’. This means that lenders will want to make sure that even if (and when) interest rates rise their borrower will still be able to pay the increased mortgage repayments. In order to do this, they must illustrate that they have sufficient and reliable income, that they have limited borrowings and that their finances are stable and predictable.
Basically, lenders are now required to make an effort to establish the affordability of the mortgage they are granting and they must allow for changes in circumstances, primarily the increased cost of borrowing in the future.
To speak to a mortgage adviser, contact us on 01628 507477.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
Getting on the property ladder is a big milestone in life, and is not something to take lightly. There are several things to take into consideration such as saving up for a deposit, finding your dream home, and finding the best mortgage product to suit you. Here we look at UK first time buyer statistics.
Can I get a mortgage without a deposit?
12 days ago
If you are struggling to get over the hurdle of saving enough deposit due to being in a rental property, but wish to purchase your own home, you may be able to with a 100% mortgage. You will need to meet certain requirements and be financially stable.
Reasons to Remortgage your Home
19 Mar 2024
If you are looking at remortgaging your property but you are unsure whether it’s the right decision, we have listed five reasons why it might be for you.
Debt Awareness Week | Consolidating Debts
12 Mar 2024
As the cost-of-living crisis continues, many people across the UK are struggling financially, many of whom are finding it hard to get debt-free.
According to research by StepChange, there are five common reasons people don’t seek help and advice with debt concerns.
Friyay Rate Reviews
6 Feb 2024
Every Friday our experts search the market for the latest rates from every lender saving our clients some serious £'s!
Looking to Extend?
2 Feb 2024
Are you looking to extend your property? There are many benefits to adding an extension to your existing home, here are a few.
Why should you consider Equity Release?
30 Jan 2024
Put simply, Equity Release is where you can release equity (money) tied up in your home for any purpose you like. In this short article, we share some reasons why you may want to consider Equity Release.
How to cut your food shopping bill
17 Jan 2024
The team at Mortgage Required may not be able to lower the prices in your local supermarket, but we have come up with a list of tips to help you lower your food shopping bill.
More information
Trusted by
