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The Financial Services Authority Mortgage Market Review could lead to higher interest rates and product fees for borrowers, according to Fitch Ratings. While Fitch welcomes proposals in the MMR which would improve underwriting practices, it says that putting more stringent underwriting criteria in place could mean a significant change to current practices for some lenders.
The assessment of borrowing capacity and disposable income, along with the verification of income for all applications, will require a detailed methodology and the provision of some form of manual underwriting for all applications is likely. This may probably lengthen the application process and therefore increase costs for the lender, which may, in turn, be passed on to borrowers in the form of higher interest rates and/or product fees.
The FSA propose to issue a feedback Statement in March 2010.
Housing Minister John Healey has finalized a £450m funding package to kickstart work on over 150 housing developments. More than 11,000 homes will be built, creating or safeguarding some 9,500 jobs. Around half of the houses will be Affordable Homes for low-cost sale or rent.
Homeloans are returning to the market with higher limits and cheaper rates.
An important element in the armoury of financial strategy usually with no initial entry costs and little exit fees.
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