- The removal of the requirement on intermediaries to assess affordability;
- The removal of the non-advised sales process;
- Most interactive sales (e.g. face to face or telephone) to be advised;
- An 'execution only' sales process for non-interactive sales (internet and postal).;
- Every seller required to hold a relevant mortgage qualification;
- It will no longer be compulsory to provide customers with an Initial Disclosure Document (but firms can continue to do this if they want to). Instead, certain key messages about a firm's service must be given to customers.
The Key Facts Illustration will not have to be given every time the firm provides the customer with information about a product that is specific to them. Instead, it will only be required where a firm recommends a product or products, where the customer asks for a KFI, or where the customer has indicated what product they want in an execution-only sale.
- Lenders will be fully responsible for assessing whether the customer can afford the loan, and they will have to verify the customer's income. They can still choose to use intermediaries in this process, but lenders will remain responsible;
- Lenders will still be allowed to grant interest-only loans, but only where there is a credible strategy for repaying the capital;
- There are transitional provisions in the MMR that allows lenders to provide a new mortgage or deal to customers with existing loans who may not meet the new MMR requirements for the loan. The borrowing will not be able to exceed the amount of their current loan, unless funding is required for essential repairs. The decision on whether or not to lend in these cases will remain with the lender.
For further information please visit http://www.fca.org.uk/firms/firm-types/mortgage-brokers-and-home-finance-lenders/mortgage-market-review.