The document is downloadable from Mortgages plc’s website (www.mortgagesplc.com) and companies can personalise it with their own corporate identity if required.
Mortgages plc developed the concept of an Affordability Declaration in response to concerns raised by the FSA in its regulatory consultation papers. The FSA warned that both lenders and brokers should ensure borrowers are fully aware of factors which could affect their ability to repay their mortgage in the future. Mortgages plc’s ‘Affordability Declaration’ is an easy to understand document which spells out the effect of rising interest rates (and other financial commitments such as credit cards and loans) on future mortgage payments and is designed to act as a final ‘sanity check’ before the borrower signs on the dotted-line.
Peter Beaumont, Sales & Marketing Director of Mortgages plc said: “The need for an affordability declaration was again put into sharp focus by the BBC investigation last year into self-certification mortgages, which highlighted bad selling practices. Our declaration is one way in which borrowers are asked to fully consider if they really can afford the financial commitment they are about to make, before they go ahead with their mortgage application.
“The response to this common sense development has been excellent and we are delighted to make it available to any broker, network or club who wants to use it. This is a simple but highly effective way of ensuring borrowers do consider the important issue of affordability, which has to be a positive move for the whole mortgage industry.”
The interest in affordability declarations has increased following the recent BBC2 programme and it is expected that more will be announced in the coming weeks and months. Any broker, packager/distributor, network or club who wants to personalise the Mortgages plc Affordability Declaration with their own corporate identity, must contact Julian Wells, Head of Marketing, on 020 7570 2948 (email: [email protected]) who will co-ordinate the necessary arrangements. As Mortgages plc is the copyright holder, it requires the Affordability Declaration to state that it has been produced with Mortgages plc’s permission.
Mortgages plc has offered to share the results of its Affordability Declaration experiment with both the FSA and the Consumers Association and is keen to gain as much feedback as possible from the industry on this initiative.
