New rules will tighten up mortgagesTuesday 21 April 2009
The financial services sector watchdog AFM is to tighten up therules governing mortgages, the Financieele Dagblad reports on Tuesday,quoting AFM chairman Hans Hoogervoorst.
The AFM, which wants the new rules to come into effect within amonth, plans to end the practice of allowing people to borrow more thanthe value of their home. This means people will no longer be able toborrow money to pay legal fees and taxes.
And the AFM plans to sharply reduce the number of mortgages whichbreak the 4.5 times salary rule. At the moment, mortgage lenders shouldonly lend people a higher multiple of their salary in exceptionalcircumstances. But 20% of mortgages currently beat that limit.
'But 20% is not an exception. We are going to tighten that up,' Hoogervorst told the paper.
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