A new lender offering self-certification mortgages had to close to new enquiries after receiving so many that it simply could not cope*. The re-introduction of these types of loans can’t be positive for an industry that has spent the last 7-8 years introducing much more stringent checks on mortgage applicants, rather than just offering a set multiple of income then deducting loans and credit card payments.
Since the credit crunch lenders now evaluate customers in a much more thorough way, taking into account all essential expenditure and generally being much more responsible, in terms of how much they lend, to what age etc.
This introduction of mortgage regulation and the Mortgage Market Review have encouraged every lender and adviser to be more responsible with regards to mortgage lending, so the re-introduction of self-certification mortgages is, in my opinion, a huge step backwards.
With mainstream lenders now offering mortgages up to 95% loan-to-value, mortgages to those with certain levels of adverse credit and some lenders lending to self-employed people with, say, only one years’ trading, I cannot think of many, perhaps any, reason that clients would need to approach a self-certification lender to obtain a mortgage, other than because they need to falsely inflate their income – something which caused so many problems in the late 2000’s and we have been trying to eradicate for nearly a decade.
I would need a lot of persuading from a customer who indicates that they needed to use a self-certification lender for legitimate reasons and, for this reason, won’t be in any rush to register with selfcert.co.uk should they decide to take business from Intermediaries.
I’m much happier dealing with clients that can prove their income and levels of affordability to me, and if they can prove it to me, the likelihood is they can prove it to a mainstream mortgage lender.
For detailed mortgage advice based on your personal circumstances, email Ian Bavey or call 01633 816522 today.