The phrase "affordability assessment" is correct and usable in written English.
It can be used when evaluating the financial feasibility of a product, service, or project.
Example: "The affordability assessment revealed that the new housing development would be out of reach for many local families."
Alternatives: "cost evaluation" or "financial feasibility study".
The new policy will be applied in addition to our usual affordability assessment.
The latter will be discarded from an affordability assessment, so as long as a person's outgoings on primary elements will be met, then the offer will officially be affordable – the rest are just "lifestyle choices".
"We know the little variations in criteria that mean that one lender, for example, will take school fees into their affordability assessment, while another won't," says Andrew Montlake of brokers Coreco.
It added that from 21 March 2016, all companies offering mortgages in the UK, including those based in European Economic Area countries, would have to comply with a European credit directive (ECD) requiring a thorough affordability assessment based on information that had been verified by the lender.
Under FSA regulations, which will come into force in April 2014, lenders will have to put this repayment plan under greater scrutiny with a full affordability assessment.
"The competitive pressure to approve loans quickly may give firms an incentive to skimp on the affordability assessment which is designed to prevent irresponsible lending and protect consumers," the OFT said in a statement.
I'm glad the FCA are working with Wonga to improve their affordability assessments.
Lenders may be reluctant to carry out proper affordability assessments in case they lose business to competitors.
That is why a cap on the total cost of borrowing makes more sense than relying on affordability assessments which leave lenders to decide what consumers can pay".
The problem with payday lenders is that for so long they have been motivated to lend money without carrying out affordability assessments because this is what draws a profit.
The FCA revealed in the summer that it was concerned about some practices in the rent-to-own sector, including the way in which major players such as BrightHouse had been dealing with affordability assessments and customers who fall behind on payments.
