The lending market in relation to mortgaging and remortgaging has experienced a profound change.  The Mortgage Market Review (MMR) went into effect on March 26.  While there are many lenders that have adopted the MMR guidelines before the deadline and borrowers will have already completed the new lending process, the impact has brought on many critics voicing their resistance to the change.  Despite the new process, the intent is to save people from financial ruin through taking out a mortgage or remortgage they cannot afford, even if the interest rates increase in the future.

Critics have complained that the process will take longer now to complete the loan process while others have felt the process will be intrusive into their personal lives.  The outcome of the process is set to make borrowers more aware of their own spending habits, saving habits and ability to afford a mortgage or remortgage beyond the gross level of their income.  Overall the process should, say supporters, save borrowers from taking on loans they cannot afford. 

Simply explained, the MMR requires that borrowers go beyond showing their income to gain approval for a mortgage or remortgage.  Instead, they must now show they can afford the loan and can repay it both when the loan is approved but in the event that interest rates increase.  This will require borrowers to share their total debt information and their expenditures for living.

The process may require more information to be shared but borrowers should take on patience knowing they are being protected through the knowledge and experience of experts putting their financial health through a stress test to discover if they’re ready for a mortgage or remortgage deal.  For complicated borrowing situations or for a more directed process, borrowers could seek out a remortgage broker or mortgage broker.