A new affordability model will replace income multiples which will be underpinned by an affordability calculator soon to be available online.
In assessing the client’s essential expenditure, such as council tax and utility bills, Coventry will use information collected from the Office of National Statistics.
To obtain applicants’ household expenditure, brokers will be asked to obtain additional information such as:
– Child maintenance
– Student loans
– Pension contributions (if not deducted from their salary)
– School fees (if above £50 per month)
– Nursery/child-minding costs (if above £50 per month)
– Buildings/contents insurance
– Life insurance
– Ground rent/service charge (if applicable)
– Planned retirement age
-Anticipated gross annual retirement income (where required)
Over the coming weeks the Coventry will be communicating the changes brokers can expect to see its service improvements such as new case submission and application screens and the provision of lending policy checks prior to an agreement in principle.
The Coventry willl be releasing a series of MMR compliant literature to support brokers’ businesses.
Any decisions in principle which have not progressed to a full mortgage application by 8pm Friday 11 April 2014 will need to be re-entered onto the new system from Monday 14 April 2014 and reassessed under MMR regulations.
Full mortgage applications submitted on or before Friday 11 April 2014, that require a material change, will be reassessed under the MMR regulations and may require additional information or documentation as well as revisiting client affordability.
