With more and more lenders switching to an affordability based model of assessing borrowers ability to repay a mortgage, Roger Taylor, director of sales and marketing at Preferred said the launch of affordability based calculations would allow more people to confirm and verify their salaries and expenditure more easily, leading to a drop in those needing a self-cert mortgage. He said: “As a result of lenders, such as ourselves launching affordability based calculations, we have seen more and more people, who may have gone down the self-cert route, able to verify their income. A number of people have said that the self-certification market is to grow, but I can see less and less people having to resort to self-cert due to affordability-based lending.”
However, James Cotton, mortgage specialist at London & Country, said that affordability based lending should not have a massive impact on the self-cert market, and the number of borrowers who have self-cert deals. “Basically the growing number of lenders offering affordability means that people can borrow more than they typically would have been able to through the traditional income multiples borrowing. Self-cert is not a way to borrow more.”
He added: “It could be a by-product that affordability-based lending is leading to reduced numbers of self-cert business, but if borrowers couldn’t prove their income by traditional income multiples, then they should still go down the self-cert route and not try and get more just because of the affordability lending.”
