Mortgage borrowers face more scrutiny | Money | The Guardian

Mortgage borrowers face more scrutiny | Money | The Guardian

More than 600,000 borrowers who took mortgages out during the housing market boom could have been denied a loan under new rules proposed by the Financial Services Authority (FSA) to prevent a return to risky lending.

Self-certification loans will become a thing of the past, as lenders are forced to verify the income of every borrower, affordability checks will be tougher and borrowers will no longer be able to use interest-only mortgages as a cheaper alternative to a repayment deal. Lenders will also be forced to "stress test" mortgages using predictions of future interest rate movements to ensure borrowers can still afford repayments even if rates rise.