A good mortgage professional should understand the complex range of lenders and their mortgages and by establishing the true facts about a customer and their needs, marry the two to produce a solution.
This has recently become a lot harder because of the way some lenders have chosen to interpret the new affordability rules.
Intermediaries are at a loss to understand how a minority of lenders have chosen to interpret what are clear rules and guidance quite so perversely.
The rules require lenders to take full account of committed expenditure. These are the things you are contracted to pay such as the mortgage, other loans and perhaps maintenance payments.
It also suggests lenders should undertake a general consideration of essential living costs and quality of living costs. There are important words in these rules, which are always carefully crafted – “general consideration”, “basic and essential” and, more importantly, the “basic quality-of-living costs”.
Guidance then follows which explains costs which can be reduced, with difficulty, such as clothing, household goods and repairs, personal goods and non-essential transport and childcare. Most people will significantly change their discretionary spending to keep their home.
The CML lobbied hard to move away from a free disposable income assessment. A move not followed by all lenders.
There are a number of policy and risk specialists at lenders who should hang their heads in shame at giving journalists the great headlines, having reduced what is a balanced piece of regulation to the comedy circuit.
Robert Sinclair is chief executive of the Association of Mortgage Intermediaries