mort.detribpas.com – Mortgage porting is an attractive option for homeowners looking to avoid early repayment penalties and stringent eligibility criteria when remortgaging their homes. It involves transferring an existing mortgage deal to a new property without incurring the usual exit penalties. However, the Financial Conduct Authority (FCA) has criticized lenders for their complicated mortgage porting policies, which prevent consumers from switching their mortgage and create confusion and mistrust.
The FCA Hits Out at Lenders Over ‘Baffling’ Mortgage Porting Policy
Legal Requirements and Lender Rules
Under the law, lenders are required to allow their customers to move over a mortgage to another one. The current rules apply to a fixed quarterly or rolling four-quarter limit, depending on the lender. The new rules clarify the scope of loan-to-income (LTI) flow and apply to porting a mortgage to another property. The FCA and PRA will continue to monitor developments affecting mortgage porting.
Despite these rules, some lenders make it difficult for customers to port their mortgage. Some banks force people to wait more than five weeks to see a branch adviser, while others forcibly foreclose properties. The FCA has called this a “baffling” mortgage porting policy and has urged lenders to make it easier for consumers to switch their mortgage if they’re not sure it will work for them.
The Changing Role of Lenders
Traditionally, building societies have dominated the mortgage market in the UK. However, with the emergence of over 200 financial institutions in the UK providing mortgage loans, the role of lenders has changed dramatically. Some lenders have introduced new products that make mortgage porting a breeze, while others have been less than accommodating.
Consumer Confidence and Trust
The ‘baffling’ nature of the mortgage porting rules has caused confusion and mistrust among consumers. Some lenders are refusing to help borrowers in this situation, and may not be willing to transfer a mortgage if it costs too much. The FCA wants to ensure that the public is confident in the mortgage industry. A reputable lender will provide details of all credit checks and credit reference agencies used by clients.
The Criteria for a Mortgage Deal
The ‘baffling’ mortgage porting approach is often a result of the criteria for a mortgage deal. Those who have changed their circumstances in the past will need more documentation from their previous lender, while those who did not before have to make more than a single change will need more information to get the right deal. In such cases, the new lender may be more willing to work with them.
Mortgage porting can be a convenient option for homeowners looking to avoid penalties and stringent criteria when remortgaging. However, some lenders have complicated policies that make it difficult for consumers to switch their mortgage. The FCA has called out these policies, urging lenders to make it easier for consumers to port their mortgage. Ultimately, a reputable lender will be transparent about credit checks and credit reference agencies used by clients and will be willing to work with borrowers to help them find the right deal.