View more on these topics

Be alert on self-cert

The market for self-certification mortgages is growing as people choose self-employment or more flexible patterns of working. But there is a cautionary tale here – an underwriter&#39s tale – as the lack of paperwork involved in this kind of lending throws more responsibility on the underwriters.

The point of self-certification is that we take the client&#39s statement of income on trust. This allows people with just 12 months&#39 business experience or contract workers to move around the housing market like anyone else. For the underwriter, this means extra responsibility when it comes to assessing risk.

We still need to form a detailed picture of the people who we are lending to. As underwriters, we have to get a feel for the application by extracting and cross-referencing information from the application form against other supporting information such as credit checks or existing lenders&#39 statements to form a lending decision.

We also use a sophisticated credit-scoring system to support our lending decisions but, more often than not, the score matches our original decision.

Our underwriting unit is structured into underwriting teams dedicated to regional areas. This means the underwriters can develop working relationships with our regional business dev- elopment managers and with advisers who refer business to them, allowing us to understand the type of business that various advisers send in.

By definition though, the process of granting a self-certification mortgage must focus on the application form. In some cases, you can almost visualise what the customers are like just from the form. What they do, how old they are, where they live, what they are using the mortgage for, all give clues to their characters as well as their credit proposition. So, here are some thoughts that should help you smooth out the mortgage process:

Address history

It is usual for customers to have to provide their last three years&#39 addresses for credit, whether it be for a store card, mobile phone or mortgage. The addresses are then checked with a credit reference agency. If the customer can be found on the voters&#39 roll or they have good credit information listed, then this is reassuring. Finding the customers at the correct address is made much easier if the postcodes are provided.


It is helpful to consider the background to self-certification. It means the customer only needs to state their income in the box on the application form – that&#39s it. Many still send pay slips, bank statements or out-of-date accounts, when they do not need to.

However, some advisers just leave the income box blank, just write “self-certification” in the box or make the figure truly illegible.

This is unhelpful to an underwriter who is trying to calculate the amount of mortgage available to the customer based on their declared income. If we do not know the income, then we have to contact the adviser, who probably needs to contact the client and all this can waste a day or more.

Divorced couples

It is increasingly common for people to divorce or separate and this has a bearing on mortgage arrangements.

Often, we are told on the form that the applicant is divorced or separated but not from whom. The ex-partner can often still be on the voters&#39 roll but we have to ask who they are in case there are children or other relatives who may need to sign legal documentation.

This can upset the customer and slow down the process. It would be easier if we were told who they are in advance to avoid embarrassment or delay.


We all know application forms are not fun. They require concentration and clear handwriting to avoid the form looking like an ink-bombing raid. But please remember they do offer relevant information to the underwriter.

If the adviser ticks the property is a standard construction house with three bedrooms and a conservatory, then that is what we believe it to be.

So when the valuation comes in stating it is made of steel, has six bedrooms and a bed-and-breakfast sign swinging over the front door, it is not surprising the application is turned down. You may laugh but these things do happen.

Packaging the application

Once the application forms are filled in, you are almost ready to go. But do not forget proof of identity. Again, this is not mindless bureaucracy – it is the law.

Having to go back to the customer to ask for proof of ID only causes delays so why not warn them they will need it at your first meeting?


The speed of the property market in means enormous pressure to process applications quickly. This emphasises the need to provide full information clearly with the application form.

Once the application is on our system, we want to get the case to offer as soon as possible. It does not matter if the completion date is not confirmed until later. Borrowers are never happy until the mortgage offer letter is received.

Getting the offer issued represents most of our effort so it is administratively tidier and personally more satisfying for the underwriter if they are moved through quickly.


Smooth Return For Manor Park

Manor Park is aiming to deliver stockmarket returns for low-risk investors by introducing a second tranche of its Guaranteed UK Accelerated Growth Fund.This offshore fund is linked to the FTSE 100 Index and provides a guarantee that all the original investment will be returned at the end of the five-year term, no matter how the […]

Close AIMs For Tax Shelter

Close Brothers is offering a new share issue in its AIM venture capital trust (VCT). The C shares were introduced to meet demand for tax-efficient investment in the light of some investors pocketing windfalls from companies such as Scottish Widows.The AIM VCT will invest in developing companies in the UK quoted on the FTSE Alternative […]

What future for &#39no MVA&#39 pledges?

I read with dismay the news of the decision by Royal & Sun Alliance and Scottish Mutual to remove the 10-year non-MVA guarantees on their with-profits bonds.The reasoning given implies that Royal & Sun Alliance may also retract their promise notto apply an MVA on annual encashments of up to £25,000.The application of an MVA […]

Abbey looking for European partner

Abbey National is said to be looking for a European partner after concluding there are no more domestic mergers to be found.The second largest mortgage lender is said to believe any further mergers would fall foul of competition watchdogs.The bank wants to sign a deal with a non-banking partner which will give it a foothold […]

Flexible reversionary trusts and estate planning

The suitability of different estate planning solutions will depend on the individual’s own circumstances, needs and objectives. When considering the different solutions available there is a trade-off between inheritance tax (IHT) efficiency and access. Overall a flexible reversionary trust provides a greater level of flexibility than a discounted gift trust and can offer individuals a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm