That strangest of mortgage products - the self-cert or non-status appears to be a dying breed - at least for now.
Designed to supposedly allow finacing to business owners and self-employed people that had less straightforward finances and couldn't necessarily prove their income.
A good idea in theory, of course in the boom time it was abused no end by people wanting to borrow more than they can afford.
People lie to get what they want - as simple as that. I have spoken to many mortgage clients over the years about mortgages in Spain, Portugal and elsewhere, and very often when the paperwork arrives they earn less and have higher commitments than they told me.
Surely there has to be a huge question mark over anyone that claims they can't prove their income ? If you are a builder or tradesman and are paid largely in cash, then you need to do some accounts, declare to the Taxman, and then you can qualify for a proper mortgage. Lenders should run a mile from anyone that doesn't put their income through a bank account. You can't have your cake and eat it
Bloody inconvenient for anyone wanting to get a self-cert mortgage, but it can only be an indication that these are high risk loans and lots of them must have gone down the pan in the last few years.
I imagine the lenders may introduce them again but it would have to be low ltv and with a premium on the rate to compensate for the added risk.
I can remember Spanish banks that would lend on the basis of a passport and letter from a "Chartered Accountant" - what a joke. Spanish banks actually tightened up on this type of thing much quicker than in the UK, as soon as they discovered Experian reports really.
What the banks in Spain don't seem to realise, is that all the bad lending that they did - overvaluations and simply asking for payslips, has been negated by their tighter lending criteria of looking at bank statements etc. Of course, all of this can be forged I suppose, but 70% lending to decent clients is surely not too much to ask, is it ?
Wednesday, November 4, 2009
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