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Want A Mortgage? Don't Eat Steak! Revealed: Bizarre Questions In New Home Loan Crackdown

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DM 12/5/14

'Mortgage applicants are being asked astonishingly intrusive questions including whether they play golf or eat steak, it emerged last night.

They are being quizzed over the price of their haircuts, their plans for more children and their hopes of a pay rise.

Lasting up to three hours, the questions are supposed to prevent a return to the reckless lending behind the financial meltdown of 2008.

Latest figures show the full impact of what has been dubbed a ‘Spanish inquisition’ with loan advances being slashed even as house prices rise.

Mortgage applicants are being asked a series of invasive questions during interviews - including whether they play golf, eat steak and how frequently they have their hair cut (library image)

Some applicants are seeing their mortgage offers halved under the new rules, with £100,000 reductions being reported.

The new ‘stress tests’, which aim to check whether a borrower could cope with higher interest rates, are being blamed for gridlock in the property market as buyers struggle to finance a house move.

A report out later this week will show that remortgage applications fell by 12 per cent last month.

The detailed questioning is a response to a market review by the Financial Conduct Authority.

Many lenders are confused about how to apply the new rules, resulting in personal or arguably intrusive questions. One woman has told the Mail she was asked whether she plans to have any more children and whether her husband was a member of a golf club.

She was then quizzed on whether her husband is likely to get a substantial pay rise this year and if she planned on ever going back to work after having children.

Borrowers are being asked detailed questions about their spending. Although a more forensic approach had been expected, this includes quizzing those who claim to have cut backing on eating out how often they cook steak.

Yesterday Ray Boulger, of mortgage broker John Charcol, said families were the most likely to suffer under the new regime.

‘The most common reason to knock people back is childcare costs,’ he said. ‘It’s particularly bad if people have more than one child, or they are under school age.’

‘There are aspects of the rules that make it difficult for lenders to apply common sense.’

Applicants are asked whether they plan to have more children and whether they are thinking of having more children. The change follows a market review by the Financial Conduct Authority (library image)

Martin Wheatley, who is behind the changes as chief executive of the FCA, has insisted the rules were ‘hardwiring common sense’ into the mortgage market.

But Mr Boulger said: ‘Comments like that demonstrate that he doesn’t know what’s happening on the ground.’ He said the stringent application of the rules was, in fact, ‘hardwiring insanity into the mortgage market’.

Figures from John Charcol show that the clampdown is cutting as much as £100,000 off the amount banks are willing to lend.

The broker said the average mortgage signed by clients last week was £300,000, compared with £316,000 in January and similar sums throughout most of 2013.

The rules raise the prospect of discrimination on grounds of gender. Some banks have been asking how much borrowers spend on haircuts, which could result in women, whose cuts usually cost far more than a man’s, being refused a mortgage where a man might not be.

A spokesman for the FCA said: ‘The review is about ensuring that lenders are asking the right questions to ensure they’re giving loans to people who can afford them.

‘There will be more consistency as these rules are applied and things bed down.’

Despite the crackdown, fears persist that the UK could be in the midst of a housing bubble.

The Confederation of British Industry will today call on the Bank of England to take whatever action is required to stop prices spiralling out of control and threatening the recovery.'

There aren't any real insights in the article itself but given the circualtion of the DM,it seems the narative is changing.

I'm sure HPC ers will particualrly appreciate the Boulger quote where he claims the recent changes are hardwiring insanity into the mortgage market’.


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good news. I'm off to see my bank today for a review and I'll see what they bring up. I somehow look forward to the questioning.

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I didn't have any probing questions when I was rejected for a mortgage last week. If you apply online then you do not need the full interview, however the same rules still apply.

It's nice to see some sanity in the process. If they don't change the rules again, we may see affordable housing return within the decade.

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These are exactly the kind of questions that my wife and I had to answer when we took out our first mortgage in 1998 - just sixteen years ago. And yet Ray Boulger, who looks a heck of a lot older than I am, apparently has no recollection of anything of the sort. Perhaps he's losing his faculties.

As for the gender discrimination point made by the idiot journalist - should women have some sort of divine exemption from this type of checks on the grounds that they have to spend more of their glass-ceilinged salaries on looking lovely?

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These are exactly the kind of questions that my wife and I had to answer when we took out our first mortgage in 1998 - just sixteen years ago. And yet Ray Boulger, who looks a heck of a lot older than I am, apparently has no recollection of anything of the sort. Perhaps he's losing his faculties.

As for the gender discrimination point made by the idiot journalist - should women have some sort of divine exemption from this type of checks on the grounds that they have to spend more of their glass-ceilinged salaries on looking lovely?

The reporter should really have taken her husband along...or maybe they were in separate cells being interviewed?

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<div class="heading" border-bottom:none;="" margin-bottom:0"="" style="overflow: hidden; padding: 0px; margin: 0px 0px 20px; float: none; position: relative; height: auto; width: 890px; line-height: 13.600000381469727px; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(216, 216, 216); color: rgb(0, 0, 0); font-family: arial, helvetica, san-serif, serif; font-size: 14px;"> Important information about your mortgage application

Thank you for choosing to apply for a first direct mortgage online.

If you continue to apply for a first direct mortgage using this online application you will not receive advice on your mortgage. first direct do offer a free advised service on the telephone from 8am until 10pm every day. If you're not sure which mortgage to choose, and would like to receive advice you can book an appointment with one of our advisors by calling 08 456 100 103 for existing customers or 0800 48 24 48 for new customers. Our Mortgage Advisors will help you review your wider financial situation and recommend a suitable first direct mortgage based on your individual circumstances to suit your needs. To receive mortgage advice please give us a call and we will be happy to help.

By choosing not to receive advice in respect of this mortgage, first direct which is a trading name of HSBC Bank plc) is not required to assess the suitability of the mortgage product(s) that you select. This means you won't benefit from the protection provided to consumers by the Financial Conduct Authority's rules which otherwise require mortgage lenders to assess the suitability of such mortgage products for you. As a responsible lender, we will also consider whether your mortgage payments and any associated repayment strategies meet our credit policy.

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This is very welcome..

However, the worrying thing is that if we do this in isolation then it'll simply lead to even more of the housing stock being hoovered up by BTLers...

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This is very welcome..

However, the worrying thing is that if we do this in isolation then it'll simply lead to even more of the housing stock being hoovered up by BTLers...

You mean those pensioners who will be allowed to withdraw a large lump sum? You could even suggest a conspiracy to crash the market ahead of mass pension draw down to please that 'special generation' who are coming up to retirement. Reason being that BTL does not make financial sense whilst rents are falling and prices are so high.

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<div class="heading" border-bottom:none;="" margin-bottom:0"="" style="overflow: hidden; padding: 0px; margin: 0px 0px 20px; float: none; position: relative; height: auto; width: 890px; line-height: 13.600000381469727px; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(216, 216, 216); color: rgb(0, 0, 0); font-family: arial, helvetica, san-serif, serif; font-size: 14px;"> Important information about your mortgage application

Thank you for choosing to apply for a first direct mortgage online.

If you continue to apply for a first direct mortgage using this online application you will not receive advice on your mortgage. first direct do offer a free advised service on the telephone from 8am until 10pm every day. If you're not sure which mortgage to choose, and would like to receive advice you can book an appointment with one of our advisors by calling 08 456 100 103 for existing customers or 0800 48 24 48 for new customers. Our Mortgage Advisors will help you review your wider financial situation and recommend a suitable first direct mortgage based on your individual circumstances to suit your needs. To receive mortgage advice please give us a call and we will be happy to help.

By choosing not to receive advice in respect of this mortgage, first direct which is a trading name of HSBC Bank plc) is not required to assess the suitability of the mortgage product(s) that you select. This means you won't benefit from the protection provided to consumers by the Financial Conduct Authority's rules which otherwise require mortgage lenders to assess the suitability of such mortgage products for you. As a responsible lender, we will also consider whether your mortgage payments and any associated repayment strategies meet our credit policy.

thats gotta be a serious loophole or a serious failure to update the website.

Its written in the unfair contracts acts that a class of person cannot have their statutory rights waived by a procedural trick. Indeed, this argument is the exact same one posters above are saying you need to go to a broker...they are saying the broker is able to avoid the statutes applicable.

This is not correct, and if they go down this route, the mortgages they take are unaffordable, then its a trip to court for the broker, the issuer and payouts abound.

As far as I can see, the rules are void if you are a business client...saying all this, Im sure the rules are so lax and the regulator so useless, that lipservice is all that is required and a coach and horses is all you need to get your mortgage protections voided.

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I didn't receive any 'advice', just a few questions and I was refused, so on an affordability 7% stress test, I din't think the 'advice' really changes the final yes/no outcome.

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You mean those pensioners who will be allowed to withdraw a large lump sum? You could even suggest a conspiracy to crash the market ahead of mass pension draw down to please that 'special generation' who are coming up to retirement. Reason being that BTL does not make financial sense whilst rents are falling and prices are so high.

Now I have heard it all. Greedy boomers to blame as house prices FALL. You couldn't make it up.

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I didn't receive any 'advice', just a few questions and I was refused, so on an affordability 7% stress test, I din't think the 'advice' really changes the final yes/no outcome.

well it does under unfair contract Acts....the vendor cant avoid liability with small print and passing the buck by saying we didnt give advice, therefore we cant be liable for a decision of the purchaser...I understand the affordability criteria are to be applied to all loans to a class of person...not a person who ticks a waiver box and accepts the identical product as is, without liability.. That is exactly what legislation in unfair contracts are designed to weedle out...

unless they just do what they please.

Of course, which I think what you are alluding to, an on line application will need to assume much more severe criteria than one which you attend to personally with the full financial enquiry.

Edited by Bloo Loo

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I didn't have any probing questions when I was rejected for a mortgage last week. If you apply online then you do not need the full interview, however the same rules still apply.

It's nice to see some sanity in the process. If they don't change the rules again, we may see affordable housing return within the decade.

Thats a naive viewpoint and, I'm afraid, very wrong. Whilst population growth continues and physical housing stock is restrained what you'll actually see is more property purchased by wealthy individuals and businesses for the purpose of making a profit from rental (as has been the case in the USA over the last three years). This deliberate attempt to restrict mortgage lending is simply another step in the commoditisation of the property market, it won't cause prices to fall as demand lost from FTB or second steeper purchasers will be more than made up by more BTL demand as more people are pushed into the rental sector which will cause rent to rise which will make BTL more profitable etc etc ad nauseum.

HPC will simply not happen in the UK until there is a fundamental review of policy re the rental market, changes in taxation relating to owning and buying property and a massive housebuilding boom coupled with restrictions on immigration. Judge for yourself how likely you think it is that these things will happen.

Because a little bit of Everything is always good...

http://www.itsarandomworld.com/2014/03/07

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Or...

Perhaps the vendors could lower their prices to a point where the buyer can get a mortgage. Believe it or not, sensible lending was widespread in the 90s and before.

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A lot of people obviously do not see that the money they overpay for a house means they will have a reduced standard of living. I did kind of hope this would focus the minds of the less financially astute. They have a choice of paying for an overpriced pile of bricks, or having the odd home cooked steak / contract mobile phone. A lot of people obviously do not see that the money they overpay for a house means they will have less money to spend on other areas of their lives.

Wonder how the little darlings would squeal if the bank didnt bother with interviews, but rigidly stuck to 3.5x single income or 2.5x joint. Whats that? You get a shit load of tax credits and you dont smoke? Great, you might have some money left over every month for a pint or a weekend away.

The way they squeal about wanting to give a bigger slice of their income for a bubble priced asset is alarming, but sadly not surprising. Anyway, F_ck em. If the lemmings are prepared to let the bank see just exactly how much they can rinse them for, they deserve everything they get.

Edited by Caveat Mortgagor

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DM 12/5/14

'Mortgage applicants are being asked astonishingly intrusive questions including whether they play golf or eat steak, it emerged last night.

They are being quizzed over the price of their haircuts, their plans for more children and their hopes of a pay rise.

Lasting up to three hours, the questions are supposed to prevent a return to the reckless lending behind the financial meltdown of 2008.

Latest figures show the full impact of what has been dubbed a ‘Spanish inquisition’ with loan advances being slashed even as house prices rise.

Mortgage applicants are being asked a series of invasive questions during interviews - including whether they play golf, eat steak and how frequently they have their hair cut (library image)

Some applicants are seeing their mortgage offers halved under the new rules, with £100,000 reductions being reported.

The new ‘stress tests’, which aim to check whether a borrower could cope with higher interest rates, are being blamed for gridlock in the property market as buyers struggle to finance a house move.

A report out later this week will show that remortgage applications fell by 12 per cent last month.

The detailed questioning is a response to a market review by the Financial Conduct Authority.

Many lenders are confused about how to apply the new rules, resulting in personal or arguably intrusive questions. One woman has told the Mail she was asked whether she plans to have any more children and whether her husband was a member of a golf club.

She was then quizzed on whether her husband is likely to get a substantial pay rise this year and if she planned on ever going back to work after having children.

Borrowers are being asked detailed questions about their spending. Although a more forensic approach had been expected, this includes quizzing those who claim to have cut backing on eating out how often they cook steak.

Yesterday Ray Boulger, of mortgage broker John Charcol, said families were the most likely to suffer under the new regime.

‘The most common reason to knock people back is childcare costs,’ he said. ‘It’s particularly bad if people have more than one child, or they are under school age.’

‘There are aspects of the rules that make it difficult for lenders to apply common sense.’

Applicants are asked whether they plan to have more children and whether they are thinking of having more children. The change follows a market review by the Financial Conduct Authority (library image)

Martin Wheatley, who is behind the changes as chief executive of the FCA, has insisted the rules were ‘hardwiring common sense’ into the mortgage market.

But Mr Boulger said: ‘Comments like that demonstrate that he doesn’t know what’s happening on the ground.’ He said the stringent application of the rules was, in fact, ‘hardwiring insanity into the mortgage market’.

Figures from John Charcol show that the clampdown is cutting as much as £100,000 off the amount banks are willing to lend.

The broker said the average mortgage signed by clients last week was £300,000, compared with £316,000 in January and similar sums throughout most of 2013.

The rules raise the prospect of discrimination on grounds of gender. Some banks have been asking how much borrowers spend on haircuts, which could result in women, whose cuts usually cost far more than a man’s, being refused a mortgage where a man might not be.

A spokesman for the FCA said: ‘The review is about ensuring that lenders are asking the right questions to ensure they’re giving loans to people who can afford them.

‘There will be more consistency as these rules are applied and things bed down.’

Despite the crackdown, fears persist that the UK could be in the midst of a housing bubble.

The Confederation of British Industry will today call on the Bank of England to take whatever action is required to stop prices spiralling out of control and threatening the recovery.'

There aren't any real insights in the article itself but given the circualtion of the DM,it seems the narative is changing.

I'm sure HPC ers will particualrly appreciate the Boulger quote where he claims the recent changes are hardwiring insanity into the mortgage market’.

Yes, pure comedy gold, looks like the days of giving away pwoperdee credits like sweets are behind us?

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Thats a naive viewpoint and, I'm afraid, very wrong. Whilst population growth continues and physical housing stock is restrained what you'll actually see is more property purchased by wealthy individuals and businesses for the purpose of making a profit from rental (as has been the case in the USA over the last three years). This deliberate attempt to restrict mortgage lending is simply another step in the commoditisation of the property market, it won't cause prices to fall as demand lost from FTB or second steeper purchasers will be more than made up by more BTL demand as more people are pushed into the rental sector which will cause rent to rise which will make BTL more profitable etc etc ad nauseum.

HPC will simply not happen in the UK until there is a fundamental review of policy re the rental market, changes in taxation relating to owning and buying property and a massive housebuilding boom coupled with restrictions on immigration. Judge for yourself how likely you think it is that these things will happen.

Because a little bit of Everything is always good...

http://www.itsarandomworld.com/2014/03/07

Assetz is strong in thiz postz

Of course, in some parts of the US, Las Vegas I read and parts of Cailfornia, the Corporates are clamouring to get out of the rental market you rightly say was booming...until they discovered that rental has a self limit based on local property tax and peoples incomes.

Mortgages on the other hand, can be made affordable by various methods....leading to a sort of control of the asset price..which is the sole aim of the Central banks to protect their own.

Treez dont grow to the Skiez

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Thats a naive viewpoint and, I'm afraid, very wrong. Whilst population growth continues and physical housing stock is restrained what you'll actually see is more property purchased by wealthy individuals and businesses for the purpose of making a profit from rental (as has been the case in the USA over the last three years). This deliberate attempt to restrict mortgage lending is simply another step in the commoditisation of the property market, it won't cause prices to fall as demand lost from FTB or second steeper purchasers will be more than made up by more BTL demand as more people are pushed into the rental sector which will cause rent to rise which will make BTL more profitable etc etc ad nauseum.

HPC will simply not happen in the UK until there is a fundamental review of policy re the rental market, changes in taxation relating to owning and buying property and a massive housebuilding boom coupled with restrictions on immigration. Judge for yourself how likely you think it is that these things will happen.

Because a little bit of Everything is always good...

http://www.itsarandomworld.com/2014/03/07

I have been subsidised by BTL landlords for many years, even during the "boom" years. Why would that change now as rents are not going up unless there are across the board wage rises?

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These new rules sound even simpler to get around than with liar loans.

If you want a mortgage just tell the morons at Barcrap that you're an infertile, unsporty, home grown veggie who shops at Aldi and charity shops and cuts your own hair.

That wasn't hard now was it.

Top tip: Cancel all your direct debits and pay for everything with cash so the f*ckers can't check.

Edited by R K

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These new rules sound even simpler to get around than with liar loans.

If you want a mortgage just tell the morons at Barcrap that you're an infertile, unsporty, home grown veggie who shops at Aldi and charity shops and cut your own hair.

That wasn't hard now was it.

Most sheeple run on credit cards, the spending pattern is there for all to see (at the bank that is)

Edited by dances with sheeple

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Thats a naive viewpoint and, I'm afraid, very wrong. Whilst population growth continues and physical housing stock is restrained what you'll actually see is more property purchased by wealthy individuals and businesses for the purpose of making a profit from rental (as has been the case in the USA over the last three years). This deliberate attempt to restrict mortgage lending is simply another step in the commoditisation of the property market, it won't cause prices to fall as demand lost from FTB or second steeper purchasers will be more than made up by more BTL demand as more people are pushed into the rental sector which will cause rent to rise which will make BTL more profitable etc etc ad nauseum.

HPC will simply not happen in the UK until there is a fundamental review of policy re the rental market, changes in taxation relating to owning and buying property and a massive housebuilding boom coupled with restrictions on immigration. Judge for yourself how likely you think it is that these things will happen.

This..

Indeed, at current rates, buying the entire stock of new construction would cost perhaps £20-30 billion a year, and generate £1-2 billion a year in rent. Given that the top 0.01% or so are generally far more concerned with keeping hold of their wealth than doing much constructive with it, the only surprise is that any commoners get to buy at all.

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Thats a naive viewpoint and, I'm afraid, very wrong. Whilst population growth continues and physical housing stock is restrained what you'll actually see is more property purchased by wealthy individuals and businesses for the purpose of making a profit from rental (as has been the case in the USA over the last three years). This deliberate attempt to restrict mortgage lending is simply another step in the commoditisation of the property market, it won't cause prices to fall as demand lost from FTB or second steeper purchasers will be more than made up by more BTL demand as more people are pushed into the rental sector which will cause rent to rise which will make BTL more profitable etc etc ad nauseum.

HPC will simply not happen in the UK until there is a fundamental review of policy re the rental market, changes in taxation relating to owning and buying property and a massive housebuilding boom coupled with restrictions on immigration. Judge for yourself how likely you think it is that these things will happen.

Because a little bit of Everything is always good...

http://www.itsarandomworld.com/2014/03/07

This has backfired in the US and it's clear to see why.

Investors have outbid those who want to live there.

It's quite simple maths, if someone can afford £100k for a house and an investor 'snaps it up' for £110k, they are never going to see a good return on that asset because the underlying rental payments are going to be coming from the person they outbid. How could they ever extract more rent [minus maintenance, insurance, tax etc. than the person renting could ever afford to pay for it in the first place? If you are buying and hoping to flip quickly for a profit then it could work, but long term it's economic suicide. You will be seeing this in the UK as laws are tightened up giving tenants more rights and health and safety costing landlords more and more.

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Am I the only one who reads an article likes this and thinks the questions are all common sense, given people are applying for the biggest loan of their life?

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