th
10
Thursday
March 2016
Teesside Property Forum
European Mortgage Credit Directive
(MCD)
European Mortgage Credit
Directive
How it Will Affect
Buy to Let
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk
European Mortgage Credit Directive
th
Adopted 4 February 2014
st
Becomes Law 21 March 2016
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk
CURRENTLY:
Residential Mortgage
BTL (Family Member) 40%
All Insurances Including Landlords Insurance
BTL (All Others)
Commercial * 2nd Charge Lending
Regulated by Financial Conduct Authority
Regulated by Financial Conduct Authority
Regulated by Financial Conduct Authority
Not Regulated at all
Regulated by Financial Conduct Authority under the Consumer Credit Act
POST MCD:
Residential Mortgage
All Insurances
Consumer BTL (New Category)
Business BTL
Commercial
2nd Charge Lending
Regulated by Financial Conduct Authority
Regulated by Financial Conduct Authority
Regulated by HM Treasury
Not Regulated at all
Regulated by Financial Conduct Authority under the Consumer Credit Act
Now Regulated by Financial Conduct Authority under MCOB Rules
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk
Consumer Buy to Let
• Any Buy to Let Mortgage where one or more of the applicants are first time landlords.
• Accidental Landlords where clients cant sell their own home so Remortgage on a Let to Buy and mortgage
the onwards purchase.
• Inherited Property where a client inherits a property and decides to Remortgage and Let rather than sell.
Estimated 11% of all Buy to Let transactions (circa 18000)
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk
How MCD Impacts Landlords
Credit Worthiness
Affordability
- More Questions around personal income / expenditure
- More proof of ongoing affordability; including potential pension forecasts
- More supporting documents required
- Longer to process applications
- Higher calculations for rental coverage
2nd Charge
- More underwriting / due diligence
- More options in time
Paperwork
- Illustrations will be different (20 year high interest rate)
- Mortgage offers will be different (binding offers)
- Applications will have more detailed questions around personal income
and expenditure and future plans.
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk
Any Questions ?
Approved Mortgage Solutions Ltd, North East BIC, Sunderland, SR5 2TA
Tel: 0191 516 6894
Email: [email protected]
Website: www.approvedmortgagesolutions.co.uk