The final curtain for Self Cert..and so long Mercury FM!

The final curtain appears to have been drawn on Self Certification and Fast-Track mortgages. With preparations in place to amalgamate the Financial Services Authority (FSA) into the Bank of England in 2012, the regulator is clearing up what it considers to be a few outstanding projects. The Mortgage Market Review papers were distributed late last year and the FSA has now launched its consultation papers, following feedback from various parties.

One major proposal is that all lenders will have to prove affordability on all loans. Therefore, every mortgage applicant will be required to provide accounts or payslips and possibly bank statements so that the lender can deem the loan affordable to the consumer. With the old Self Certification mortgages and on some current ‘Fast Track’ mortgages, proof of income was not necessarily required by the lender.

Other changes also include providing proof of affordability into retirement and on interest only loans (which will be assessed as though they were on a Repayment basis). House price inflation or downsizing to a smaller property will no longer be acceptable as a suitable repayment option.

These, and a myriad of others points, are now at the consultation process and are planned to be implemented later in the year.

The Council of Mortgage Lenders has reported a great month for new lending in June, some 15% up on May and a 7% increase on June 09. However, whilst the market remains delicate, the power appears to be turning from the sellers to those who can actually raise mortgage finance. Whilst market products remains constrained, this could be very much to the benefit of the buyer. Remember, take independent advice before agreeing to proceed on a mortgage.

And finally…it’s the end of an era as Mercury FM changes to Heart FM. I’d like to personally thank all of the staff at Mercury FM for delivering a great local radio station in recent years. They certainly assisted in growing AToM’s exposure in the local area. I wish them all the very best for the future.