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Let mortgage prisoners borrow 10% more, says AMI

The Association of Mortgage Intermediaries says mortgage prisoners should be able to take on additional borrowing of up to 10% as long as it is in their best interests.

The Mortgage Market Review proposals state that lenders can waive some of the regulator’s affordability rules for mortgage prisoners – for example, those in negative equity or those who have self-certified in the past – only if it means no additional borrowing or higher monthly payments.

However, AMI director Robert SInclair wants the FSA to allow these individuals to borrow up to an additional 10%.

He says: “If a consumer wants to change to a fixed rate mortgage to ensure a greater degree of certainty about their expenditure, even if it means an increase to their monthly repayments, it may be in their best interests to do so.

“There may be circumstances where a small amount of additional borrowing may be needed to make a house move viable i.e. to cover Stamp Duty, estate agents and removal costs etc.  

“Such flexibility should be left for the lender to determine as part of its lending policy but we would consider a 10% tolerance on both the additional borrowing and the monthly cost of borrowing to be a reasonable amount.”

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  • AA 5th April 2012 at 7:55 pm

    What a ridiculous comment above.

    Im a broker and im glad the AMI are the voice for brokers.

    Most people are over reacting (with comments on here and previous reports) and jumping to conclusions.

    Its 100% the lenders that affecting the market currently.

    In addition, non advised sales will be banned, no doubt about that. Banks will have to train their staff, not just so its a level playing field, but more to protect the consumers. The thought of underpaid unqualified staff advising people’s biggest commitment, is the reason for the change. FSA will ignore CML BSA and that other ‘consumer/themselves’ group.

  • anon 5th April 2012 at 1:29 pm

    Good luck with that one Rob my old mate, have you had your head buried in the sand for the past 18 months have you not seen the way the FSA are systematically destroying the mortgage market. If the above happens I will run down Oxford Street naked . !!! The AMI would be better served listening to brokers and challenging the FSA and lenders on their current practices.