News

The good news

Fortunately for everyone there are checks and balances in the self-cert market. If you earn, say, £30,000 and claim you earn £80,000 in order to apply for a £320,000 mortgage then your lender will probably spot that something isn’t quite right. Lenders take a look at the ‘ability to repay’ of potential customers and a simple credit examination should prove that repayments on a £320,000 loan would be too high for this applicant to handle. So the application should be refused.

The chief city regulator, the Financial Services Authority, is also known to be keeping a close eye on the self-cert sector which should ensure that fewer abuses occur. So with luck any crisis can be averted. Meanwhile those borrowers who are using self-cert applications for the right reasons can continue to take advantage of a booming market.