Self-cert mortgages hit by credit crunch
The previously “very competitive” self-certification mortgage market has “contracted” following the recent credit crunch.
This will come as bad news to self-employed professionals such as engineers and dentists who may find it difficult to get a mortgage through another channel.
Richard Farr, managing director of the Association of Mortgage Intermediaries (AMI) explained that, although this mortgage option only made up five per cent of the market, it is essential for particular groups who cannot prove their income.
He said: “Prior to this, selected groups would have found it hard to obtain a mortgage and be excluded from the housing market.
“The market had been growing well. However, the emergence of the credit crunch has contracted the market.”
A self-certification mortgage allows borrowers to declare their income without providing proof and, although a successful scheme, can often be risky for lenders with a high-risk lending strategy.
