Lenders Changing Criteria on Properties That Can be Mortgaged
Borrowers were warned that lenders would be stricter on approvals. Banks have been told to provide more loans to businesses and less loans to the housing market. It seems the warnings have come to light as lenders are denying loans on properties previously approved in the past.
Lenders have put stricter criteria on approved loans. One couple was denied a remortgage from the same lender on a property they had received approval for four years earlier. The denial came from data that had not changed since the last approval. Namely a report from a third party surveyor and the same surveyor was used in 2006. Apparently the surveyor reported the home was next to a restaurant and a busy street. While this was the case in 2006 as well and there was no change, the lender’s criteria had changed. The lender was now changing criteria as to how sellable a home would be in the future and would be staying away from any property that was not highly marketable. Melanie Bien of Savills said: "When it comes to the valuations and credit-scoring, you find lenders are being a bit picker." With lenders changing their criteria for which homes are mortgageable many homeowners may find it difficult to secure a remortgage from the very lender that approved their property in the past.