As the Financial Behavior Administration (FCA) reviews the strict loan rules implemented after 2008, the mortgage market is on the edge of potential changes.
In a recent letter, FCA acknowledged that it is necessary to simplify the regulations, and achieve a better balance between protecting the borrower and expanding the ownership of the house. This move may be welcomed by the lenders and the agent.
A overdue field that is considered is to use interest -only mortgage loans. Although these are still available in technology, strict standards make most borrowers unable to access them. Most of these scandals, such as the wrong sales of donation policies, have generated serious consumer distrust.
However, today’s mortgage market is a very different place. The industry has developed and becomes more professional and transparent. With appropriate guarantee measures, interest loans can play an important role, especially for borrowers 55 and over. Many of these customers have a great chance of lenders willing to accept this niche market.
In order to ensure the effective work of the product, the guarantee measures should be embedded in the process. For example, a meeting that needs to be compulsory to face with a lawyer before completing (the standard practice of life -long mortgage loans) can ensure that the borrower fully understands its commitment. Clearness and education are essential to protect customers and allow them to freely choose solutions suitable for their needs.
Another potential advantage is that it is limited to the mortgage loan of retirement only. At present, the joint application is usually faltering under the strict burden rule rules, so many elderly couples cannot access the product.
It is difficult to avoid people who think that older borrowers are sometimes in an unfavorable position in the loan market. Through carefully adjusting the policy, this imbalance may be corrected, providing a customized product that truly meets the needs of aging population.
FCA is willing to re -consider outdated policies to open the door for innovative thinking. By combining strong guarantee measures with flexible standards, the lenders and brokers can provide solutions to expand access permissions and protect borrowers. If you have thoughtful loans, interest loans can bring huge value, which is not only to borrowers, but also for the entire mortgage industry.
Malcolm Davidson (Malcolm Davidson) is the managing director of Moneyman, Britain
