Affordability – Don’t get caught out by Lender Calculator Changes
A key element of many lenders’ affordability calculations are the minimum values they apply to standard items of expenditure to ensure that an application includes a realistic assumption of living costs.
These figures are typically taken from data from the Office for National Statistics (ONS) and it is nearing the time when lenders update this ONS data. Although this process occurs behind the scenes, the updates can lead to different affordability results for borrowers.
Updating ONS data within an affordability calculator is rarely, if ever, announced by lenders. As an example, were you aware that Santander had recently updated its figures? Therefore, how do you know whether changes have been made and how they may affect your affordability prospects in relation to borrowings?
It is not uncommon for borrowers and brokers to be caught out by shifting affordability calculations between a Decision in Principle (DIP) and full application, this is obviously particularly annoying if it throws out an application when you are well advanced in the process thereof.
How can you keep on top of these changes, especially for those borrowers whose affordability was assessed a number of weeks ago?
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Best Price FS Team
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