FCA Closely Monitoring Mortgage Lending To Those With Poor Credit

Apparently, at the Association of Short Term Lenders Conference that took place on the 22nd September 2016, Lynda Blackwell, Manager of the Financial Conduct Authority’s mortgage sector team, announced that they were aware that there was more subprime lending, an increase in lending to the self employed who have only been able to provide one year’s accounts or less and to those with a very poor credit rating. The Financial Conduct Authority is closely monitoring this situation.

If you require a commercial mortgage then it will need to be demonstrated that the repayments are affordable.
A borrower needs to be able to demonstrate that a mortgage request is affordable.

Lynda Blackwell stressed how important it was for mortgage lenders to make sure that a potential borrower was able to afford to meet the repayments on a loan from their income. In respect of bridging finance, it was expected that lenders would make sure that there was a satisfactory vehicle in place to repay this sort of short-term finance.

Obviously, the Financial Conduct Authority does not wish to see the problems re-occur of a few years ago resulting from lending being more freely available to some borrowers who perhaps were not really in a position of being able to comfortably afford to repay a financial commitment.

It is important that when a borrower is seeking finance whether it is the likes of a commercial mortgage, residential mortgage, business loan, development finance or a bridging loan that the borrowing is affordable. Evidence should be provided to confirm that the monthly repayments can be met and, in the case of a bridging loan, that there is a clear and realistic strategy in place to repay the liability by a certain date and if necessary, in the meantime, cover the interest payments.

Here at Commercial Mortgage Link, we can introduce you to an experienced mortgage broker who can initially assess your suitability or otherwise for various forms of finance based upon your circumstances – whether you have a good or poor credit history. He or she will be aware of the lending criteria of the extensive panel of lenders at their disposal. So, if you would like to have a discussion with someone about a lending proposition why not get in touch.

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