Navigating the UK mortgage market requires a thorough understanding of the regulations that govern it. The Financial Conduct Authority (FCA) oversees mortgage lending practices to ensure fairness, transparency, and consumer protection.
Key regulations include affordability assessments, which mandate that lenders evaluate a borrower’s ability to repay the loan under different interest rate scenarios. The Mortgage Market Review (MMR) introduced stringent requirements for verifying income and assessing affordability, impacting both borrowers and lenders.
Additionally, regulations around interest-only mortgages, buy-to-let lending, and lending to self-employed individuals have specific criteria and compliance standards. Understanding these regulations can help borrowers prepare better and avoid potential pitfalls during the mortgage application process.