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Why recommend a Mortgage Capacity Report (MCR) to your clients?
Key Benefits:
Recommending a Mortgage Capacity Report (MCR) to your clients provides them with strategic and practical benefits that enhance their home-buying or financial planning journey
- Reliable: More accurate than bank visits or online calculators.
- Credible: Enhances the credibility of your financial settlement in legal proceedings.
- Informative: Provides comparisons of Fixed vs. Variable rates, monthly repayments, and
- other potential costs, without recommending specific lenders.
- Cost-effective: Joint reports are available for one fee, covering both parties in a divorce.
- Detailed: Tailored to various financial scenarios.
Types of Assessments:
- Standard: Shows maximum and affordable borrowing with example illustrations.
- With Scenarios: Explores the impact of changing circumstances on mortgage capacity.
- Joint: Evaluates mortgage capacity for multiple parties in one report.
- No Capacity: For those unable to secure a mortgage, available at a reduced rate.
Ask an expert
How is an MCR different from a Decision in Principle (DIP)?
A Decision in Principle (DIP) is a preliminary approval from a lender indicating they are willing to lend a certain amount based on basic checks. An MCR, on the other hand, is a more detailed financial analysis conducted by a mortgage advisor to assess affordability and lender suitability.
Call us now to find out more
For more information call 01322 522523 or email mcr@lawtonfs.co.uk
Newsletters and Updates
The option of joining our database also gives you access up to date information on MCRs and case studies which may help you to educate your clients.
Speaker at your events
As an accomplished presenter, Chris Lawton can provide a tailored presentation on the features a comprehensive of MCRs to your practice, association or chamber.
Why importance in
Divorce Proceedings:
- Property Division: Helps determine each party’s ability to take over the mortgage.
- Financial Independence: Supports individuals in establishing post-divorce financial independence.
- Legal Compliance: Aids in fulfilling financial disclosure requirements in the UK.
- Negotiation: Facilitates informed settlements regarding housing arrangements.
- Court Evidence: Provides valuable evidence in property disputes during court proceedings
Frequently asked questions
Is a Mortgage Capacity Report legally required?
No, it is not a legal requirement. However, it can be a helpful tool in scenarios like financial planning, divorce proceedings, or gaining credibility with estate agents or sellers.
How long is a Mortgage Capacity Report valid?
An MCR reflects the financial situation at the time it is prepared. Changes in income, expenses, or financial commitments can affect its validity, so clients may need to update it periodically, typically within 3–6 months.
What information is needed to create an MCR?
To prepare an MCR, clients are usually required to provide:
Proof of income (e.g., payslips, tax returns).
Details of monthly expenses (e.g., utilities, childcare).
Information on existing debts or financial commitments.
Credit history details.
Can an MCR guarantee mortgage approval?
No, an MCR is not a guarantee of approval. It is an assessment tool that helps identify the client’s potential borrowing capacity and suitable lenders but does not replace the lender’s own underwriting process.
Case study
Case study 1 Using an MCR a couple identified how much they each needed from the sale of their marital property and a true understanding of how much they could each afford to borrow. This led to a successful financial settlement
Case Study 2: During due process, a client was interviewed and, upon producing her credit report, discovered that the ex-husband had taken out credit arrangements in the wife’s name and not paid them. This means that we were able to demonstrate that the client had no affordability, meaning she needed a larger share of the equity to help house her and her 2 children.
Call us now! 01322 522523
Lawton Financial Services are proud members of Resolution.
Resolution is an organisation of lawyers and other family justice professionals who are committed to following a non-confrontational and constructive approach to resolving family issues.
For more information go to https://resolution.org.uk
