Reply #5: It just sounds like a return to the old system, to me [View All]

[muriel_volestrangler]

I haven't applied for a mortgage in the past few years, but when I did in the 90s, they wanted to know my income, my ability to pay the mortgage combined with other commitments, and pointed out what increases in interest rates would mean (whether there was a formal calculation, I can't remember).

But I can remember that one chain I was involved in fell through when the guy I was buying from, who was self-employed, was denied a mortgage for the larger house he wanted (their family was growing) because he couldn't prove his income to mortgage providers to their satisfaction. There was none of this "we'll assume everyone knows what they can afford, and take their word for it".

I suspect that a lot of the 51% of mortgages "that would not have been made" would just need a bit more paperwork and calculation, or some of them would have had to have a slightly smaller mortgage - so that house prices wouldn't have inflated so quickly.