72% of aspiring homebuyers do not know what the MMR is; of those that do, most are ill-informed, believing it means smaller deposits and relaxed lending criteria
London, UK, 28 April 2014 – Three quarters of aspiring homebuyers in the UK do not know what the Government’s Mortgage Market Review (MMR) is, according to a survey1 commissioned by Experian®, the global information services company.
Furthermore, among the 28% that claim to know what the programme is, many are confused or ill-informed as to what these new affordability measures could mean for their property dreams.
Introduced from April 26 2014, the Mortgage Market Review (MMR) aims to make mortgage lending more responsible and stable. However, it does mean that those hoping to borrow to purchase a property will need to show they have considered how they will be able to manage their repayments in the long term - for example, in the event of an interest rate rise.
Despite the MMR’s emphasis on affordability, a quarter of all would-be buyers surveyed admit they currently find it difficult to budget each month.
Preparation is key
In order to stand the best chance of securing a mortgage – and to get one with the best interest rate – homebuyers need to get their finances in the best possible shape. However, it appears very few potential buyers are doing that.
A fifth (19%) don’t plan on preparing their finances before their mortgage application, while another fifth (18%) only plan on preparing a month prior to their application. Moreover, fewer than one in four (23%) have checked their credit score in the last six months, which would help provide a clear picture of their financial situation and how they are likely to be viewed by lenders.
Of those looking to buy a property:
Peter Turner, Managing Director, Experian Consumer Services, UK & Ireland, commented:
“Although none of us have the luxury of a crystal ball to see into the future, understanding how much we can really afford to borrow - and crucially, repay - even if our circumstances change, is so important for any credit application.
“Time spent preparing your finances now will pay dividends in the future. We’d advise potential homebuyers to look at their financial situation as soon as they make the decision to look for a home, and not just before they apply for a mortgage. This will give you the chance to make any improvements necessary and get accepted - and at the best rates, too.
“Simple steps like increasing your monthly credit card repayments, ensuring you’re registered on the Electoral Roll and not taking on additional borrowing can make a real difference to how lenders see your ability to afford and manage a mortgage. But it does take time to build a clear, consistent track record of positive money management.”
Here are some simple tips from Experian CreditExpert to help you prepare for a mortgage application after the Mortgage Market Review:
Notes to editors:
1Research was carried out online by Research Now on behalf of Experian CreditExpert among a representative panel of 1,457 UK adults, completed on April 22 2013.
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Experian Consumer Services
Joanne Leahy, PR Manager - 020 3042 4089 / Joanne.firstname.lastname@example.org
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