CeMAP MRT2 Further Advances, Remortgages, Second Charge & Bridging question: lender using

CeMAP MRT2Further Advances, Remortgages, Second Charge & Bridging

A lender is considering Joel's like-for-like remortgage from another lender under the modified affordability assessment in MCOB 11.9. Which change to his application would stop the lender using that route?

A Choosing a five-year fixed rate instead of the two-year fixed rate he first asked for
B Adding £8,000 to clear a car loan
C Applying through a mortgage broker rather than going directly to the new lender
D Adding the new lender's £999 product fee to the loan rather than paying it upfront

Show the answer and explanation

Answer: B. Adding £8,000 to clear a car loan

MCOB 11.9.1R limits the modified assessment to remortgages with no borrowing above the outstanding balance (other than product or arrangement fees), on the same property, with no payment shortfall now or in the past 12 months. Clearing a car loan is additional borrowing, so a full assessment under MCOB 11.6.2R would be needed. The product chosen, the distribution channel and adding a product fee do not take the case outside the section.

Common mistake

Thinking that adding a product fee counts as additional borrowing.

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