In a post Mortgage Market Review (MMR) world, the compliance requirements that mortgage advisers have to undertake is evolving on a weekly basis. When meeting with their clients there are two key words advisers must bear in mind: Feasible and Affordable.
Feasible – Is what the client is proposing to do, feasible? To consider this the adviser must take themself out of the direct conversations that they have with the client and think “Would this make sense” to someone who does not know the client? Is what they are proposing an obvious direction for them to take? If the adviser can answer yes to both of these questions, then they should have no issues with advising the client of their options and which lender will be able to help them.
If the adviser cannot answer yes, then, in a post MMR world, they do need to be asking more questions of the client. The adviser needs to explain the importance of full disclosure of all pertinent points and hopefully then any veil of secrecy will be dropped. Without this feasibility cannot be proven and the case will simply not proceed.
Affordable – This is a hot topic post MMR, as lenders have new rules and regulations that they have to adhere to, when assessing any mortgage application. The mainstream media have created a perception that a lender will “forensically” look at income and expenditure and mortgage applicants will have to stop going on holiday or getting a piece of steak for dinner! Again, the adviser is there to assist the client in explaining what the lender is looking for in these circumstances, so that there are no nasty shocks further down the line.
Of course, with any good compliant practice, all of the meetings, conversations & emails between the adviser and the client must be correctly documented. This is so that the adviser can back up any advice given and also be able to provide the lender the necessary evidence to support the application.
Being able to show the right business quality to the lenders and advice to the client, should create a robust environment for all. Banks will want to see all types of information about the client, so before this is sent to the lender, the mortgage adviser should check this. By utilising the internet and social media correctly, the adviser is able to conduct additional checks on lots of supporting paperwork themselves before submitting it to the bank.
Finally, the intermediary is there to advise and arrange the mortgage but this currently comes with a bit of education as well. Handled correctly, the new rules should lead to a better and more efficient process for all.
For arranging a mortgage a fee of £200 is payable on completion.
Your home may be repossessed if you do not keep up repayments on your mortgage.