Recent speculation has focused on a small minority of brokers abusing self-certification mortgages by overstating the income of their clients, putting the industry's reputation and the client's future at risk. And all for the chance of a quick sale.
Cowboy brokers jeopardise the relationship with their client and also with the lender to which they refer business.
But by no means is this the norm and it shouldn't put off the majority of mortgage brokers.
Self-certification mortgages are particularly useful for the following:-
The self employed who are not able to provide three years' accounts as proof of income
Those on short term contract work
Anyone who has had a succession of jobs in a short space of time
Individuals who receive a large chunk of their salary as a one-off annual bonus
Steve Sandiford, head of borrowing products at BM Solutions, says: “Self-certification is a very valuable weapon in a mortgage adviser's armoury. It is ideally suited for those whose income does not come in regular monthly chunks.
“Intermediaries have a responsibility to give their clients best advice.
“If a mortgage has been 'sold' on the basis that it extends the applicant's borrowing ability without taking into account affordability, clearly this is against the spirit of best advice.
“That said, professional advisers should not let the behaviour of a very small number of brokers detract from the merits of self-certification.”