Interest-only deals could become non-existent

Interest-only mortgages will no longer be available if the suggestions given in FSA’s Mortgage Market Review will go into effect.

The Intermediary Mortgage Lenders Association (IMLA) has informed that lenders will stop offering interest-only loans altogether if the FSA’s proposals are enforced.

IMLA suggested that it would be more reasonable for the FSA to bring about only minor changes to the rules that would grant lenders the right to make decisions on a case-by-case basis instead of applying a set of rigid regulations to all cases without exception.

According to IMLA, bringing into use a more effective affordability test and a better assessment of the borrowers ability to repay a loan would be more than enough to achieve the purpose of ensuring responsible lending.

Peter Williams, of IMLA, says the FSA will fail to create a flexible market better suited for consumers if it implements its proposals regarding interest-only loans.
 


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