Mortgage regulation good in the long run
02 August 2004
Despite the chance of initial confusion, Legal & General believes the imminent mortgage regulation will give greater clarity and security.
Regulation is due to start in three months and it is predicted that both mortgage advisers and homebuyers will initially be rather bewildered by the changes.
However, as with all major financial changes over the years, Legal & General feels that consumers will quickly overcome any early teething-problems and adjust to the new rules and working practices.
The director of housing marketing at Legal & General, Stephen Smith, said: "While homeowners will notice new, more detailed and potentially baffling paperwork that will go with buying a mortgage after October, they need to be aware of the more subtle changes going on beneath the surface which could have a critical impact on the level of advice they receive and the loan they end up with. "
He explains: "Only brokers offering a choice of mortgages representing the whole of the market will be able to call themselves Independent Mortgage Advisers in future. Any other description means the loans recommended come from a narrower set of lenders."
Mr Smith concluded: "As the market goes through the transition to formal regulation, homeowners should take greater comfort knowing that the new rules build upon the achievements of the Mortgage Code."