BLOG: Could a pint in the pub reduce your chances of getting a mortgage?
The Financial Conduct Authority (FCA) and the lenders have spent the best part of two years mulling over what the regulations should contain and how they should be implemented.
But guess what? The housebuyers who are supposed to comply with the new rules have no idea what they are and how they might affect them.
Under the new rules, your mortgage application will now be the subject of a “stress test” and a much more intrusive approach to affordability.
That means that every time you use your bank card you will be placing a footprint on your bank statement, and when the lender gets hold of it they will be looking closely at your spending habits, social life, recreational activities and interests in sport to name a few.
It has been said by some that if you happen to place an online bet on the Grand National or spend £5 each week on the lottery, you will need to disclose your gambling habits.
Others have suggested that if you buy new clothes or go down the local pub for a couple of pints you might be reducing your chances of getting a mortgage. Is this true? Who knows?
It seems unfair that people who have spent the last four years preserving their equity, saving for a deposit and being financially prudent might now struggle to get a mortgage because they were not aware that the FCA, and in turn the lenders, were changing the goal posts and introducing lifestyle criteria and future interest rate changes into their thinking.
It would have been good to have told them earlier so they could have changed their lifestyle and maybe that occasional footprint on the bank statement would not go against them.
Let’s hope that the odd bet, participation in the lottery, that rare new blouse or pair of jeans or a few drinks down the local will not count against those hard working, responsible homeowners and first time buyers looking to make that move.
Regulation without certainty, transparency and consistent application of the rules is hard enough, but not knowing about it in advance could result in the MMR becoming a painful epidemic.
Michael Bruce is chief executive of Purplebricks.com