An Accord Mortgages spokesperson said: “We welcome positive changes to the mortgage market which benefit consumers and we have been preparing for some time for the new regulations which are being introduced as part of the Mortgage Market Review.
The changes which will take effect from 29 March are;
Future financial commitments
Brokers will need to tell Accord if their client intends to take out any form of finance in the future. This will need to be disclosed at application.
Ground rent and service charges
Accord will use any ground rent or service charges brokers’ clients have to pay in its affordability calculation.
Sales particulars, bank statements (for remortgages) or a solicitor’s letter will be required as proof of the monthly payment.
Future reductions in income
Brokers will need to tell Accord if their clients are aware their income will reduce at any time in the future.
Some examples may include loss or reduction of overtime/bonus; notice of redundancy; planned reduction in working hours; end of contract working.
Product fees
Customers can choose to either pay the product fee before Accord issues the mortgage offer or add the product fee to the mortgage at completion.
The fee will be included in the affordability assessment and the maximum to be lent. The fee will not affect the loan-to-value.
Terms into retirement
If the mortgage term runs into retirement customers will need to be part of a company or private pension scheme.
An annual pension statement, pension details supplied by the pension provider or payslips showing the applicant’s pension contributions will be accepted as evidence.
If a customer is within 10 years of retirement, Accord will assess affordability using both their current income and their post-retirement income.
Retirement is the declared retirement age or age 65, whichever is lower.
Clients with adverse credit
Accord will include any unsecured debt customers are planning to repay as part of its affordability calculations.
As part of the MMR changes, Accord will update its current adverse credit criteria on 29 March.
This will include missed monthly payments on unsecured debts in the last 24 months.
Accord has launched a dedicated MMR page on its website which will provide brokers with details of its criteria changes and how it will process applications in the run-up to the MMR coming into force.
This week Nationwide published its MMR citeria changes while Santander pledged its continued support for brokers while they adapt to the new rules.
