Self-cert mortgages "valuable part of market"

16 July 2007
Discouraging or preventing people from opting for self-certification mortgages would negatively affect thousands of consumers, according to one expert.

Andrew Strange, policy analyst at the Association of Mortgage Intermediaries, said that this type of loan was a valuable part of the mortgage market as it gave more opportunities to those with unconventional salaries.

His comments come following action taken by the Financial Services Authority (FSA) last week against five sub-prime mortgage firms which had customers who had self-certified their income for reasons which were unclear.

Mr Strange highlighted the fact that this move by the FSA would not have an effect on practices in the self-cert market.

Self-cert mortgages are available for those who are not able to show proof of how much they earn - such as the self-employed.

In these cases, providers will need to know details of where their customers' money is coming from but not how much they will accumulate in total.

Describing the mortgage market in the UK as "the most innovative in Europe", Mr Strange said: "If you say that self-certification is bad, actually the consumer detriment is that the people out there who genuinely use these products correctly will be missing out: the self employed, people with multiple incomes - bonuses, that kind of thing."

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