Affordability is key to lending
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Labour MP James Plaskitt clearly does not understand the mortgage market in general or the self-certified mortgage market in particular (Money Marketing, November 6).
The mortgage market is defined by lenders who provide funds on an income-multiplying basis.
However, an income-multiplying basis is often an insufficient guide to affordability, as progressive lenders such as Standard Life and Nationwide have recognised.
The self-certified mortgage has developed to address the problem of affordability which income multipliers cannot meet. In such circumstances, the declaration of total income does not have to be accurate in order for the mortgage to be affordable.
The duty of the mortgage adviser is ensure that, whatever income is declaredto meet unrealistic income multipliers, mortgage repayments are affordable.
In that respect, the accuracy of the information provided is frankly irrelevant provided the mortgage is affordable.
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