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.
“As a responsible and prudent lender, Accord already assesses all mortgage applications on affordability and this will continue post-MMR.
“We have communicated with brokers to outline the small number of changes to lending which will come into force on 29 March and will continue to support them throughout the process.
“We have also launched a dedicated MMR page on our website, which will provide brokers with details of our criteria changes and how we will process applications in the run-up to MMR coming into force.”
Changes to criteria
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 & 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 LTV.
Terms into Retirement: If the mortgage term runs into retirement, customers will need to be part of a company or private pension scheme. 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.
