October 3, 2022

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Getting a Mortgage becomes more difficult after you tap the fingers of the regulator |  Currently

Getting a Mortgage becomes more difficult after you tap the fingers of the regulator | Currently

It’s getting more difficult to get a mortgage this summer if you can’t get enough money to buy a home according to the lending criteria. According to mortgage advisors, less allocation is provided after a slap on the toes of the Financial Markets Supervisory Authority (AFM).

Last month, the AFM stated that the criteria used by mortgage providers leave much to be desired. This emerged from an “exploratory study” among five lenders. in message The sector was asked to adjust policy to prevent excessive lending.

The result is that certain groups find it more difficult to obtain a mortgage, explains Michel Meijer, principal at Van Bruggen Adviesgroep. “Mortgage lenders are becoming more critical in responding. In certain cases, financing is no longer available.”

For example, Meijer mentions a woman in her seventies who has lost her husband, has her own house of surplus value and wants to live in a smaller house. “In the past 10 years, this has always been possible, because the costs of housing in a new house are falling. Now we have to test the situation and approach it differently and the mortgage is not provided. Also in the case of divorce, lenders are tested more stringently. “

Mortgage expert Marga Lankreijer of Independer believes the way the allocation was done was in some cases very non-committal. “Sometimes it just depends on the employee who has to approve the mortgage. There were very few frameworks. Mortgage lenders now have to write down situations where they might better deviate from the standards.”

Increased risk of excessive lending due to ambiguous formulations

Banks and other lenders have used phrases like “should be structurally affordable” or “should be flexible” in their business rules, without making that tangible. It is difficult for an employee to assess exactly what affordability or durability means. Open formulas are the most popular for income criteria, tailored mortgage criteria, and bridging loans. According to the AFM, this increases the risk of excessive lending.

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It is no coincidence that the warning came this summer. Mortgage interest rates have risen sharply this year to an average of 3.8 percent. Last year it was still 1.5 per cent. This makes it difficult for home buyers to borrow the required amount. According to the AFM, consumers are more likely to push the limits of lending criteria.

“Customers have to squeeze in all kinds of twists and turns to finance their purchased home,” Lancreer says. “Allocation is often involved.” “One solution is that the interest is not fixed for twenty years but for ten years, or you pay off a student loan. But if it is also necessary to include, for example, a wage increase in the future, then mortgage lenders ask for all kinds of information and documents. So it takes It also takes longer in this case. It can cause additional stress for clients, who of course mainly want a home.”

According to Meijer, this isn’t just about slapping AFM’s fingers. “It also has to do with banks’ fear of economic uncertainties coming our way. Will people still be able to meet their obligations in the future? Not providing allocation when necessary is a problem in my opinion. But taking a critical look at the proof is good in this day and age, I think “.

The AFM supervisor has announced that a follow-up investigation will be conducted to check whether the assignment policy is sound.