Lenders and borrowers need to take a 'holistic view' when considering mortgage affordability, according to the Council of Mortgage Lenders (CML).
The mortgage application and approval process should take a borrower's overall financial circumstances into consideration, one industry organisation has claimed.
Affordability can change over the course of a mortgage, the Council of Mortgage Lenders (CML) has said, suggesting that any possible fluctuations in income and changes to circumstances should be considered.
"What is needed is a clear picture of the borrower's position over the period of their loan," the organisation explained in its latest News&Views report.
Tax, benefits and credit systems are among those issues that the CML suggests are easy to access and assess during the mortgage application process. National Insurance payments, contributions to savings accounts and general household expense were also cited as issues lenders need to take into account, and which can have an impact on a borrower's ability to meet repayments.
"As long as any changes in circumstances and government policy are factored into the calculation, it is possible to understand and predict how a borrower's circumstances may change over time," the council added.
The CML also used its latest newsletter to highlight three main points it believes should be included in the upcoming Budget. These include increasing the stamp duty threshold, providing more help for first-time buyers and extending the ISMI and mortgage rescue schemes.
